Residential property sales in the UK increased by 0.6% between October 2017 and November 2017, some 7.1% higher compared with the same month in 2016, the latest official figures show.
However, for November 2017 the number of non-adjusted residential transactions was about 0.4% lower compared with October 2017 but 6.1% higher than in November 2016, according to the data published by HMRC.
The data report points out that the long term movement in the number of residential property transactions reflects the general performance of the housing market over the past 12 months with the sharp fall in sales at the end of 2007 coinciding with the housing market slump and credit crunch.
Prior to this point, the number of transactions had risen constantly over a number of years to reach a peak of around 150,000 per month. From December 2008 to February 2014, there was a slow but steady upward trend in the seasonally adjusted count.
The seasonally adjusted transaction estimate shows a distinct peak at December 2009. This is associated with the end of the Stamp Duty Land Tax ‘holiday’, during which the lower tax threshold was temporarily raised to £175,000. The forestalling effects of this holiday coming to an end also show as higher than normal transactions in the previous few months as homebuyers brought forward their purchases. There is a corresponding drop in the early months of 2010.
There is another, smaller, peak and trough in March and April 2012 due to the ending of the SDLT first time buyers’ relief. This relief was in effect from 25 March 2010 to 24 March 2012 inclusive. Around 7,000 transactions per month benefitted from this relief, although this number doubled in its final month.
March 2016 recorded the highest number of sales in the last 10 years and the HMRC report says this peak is associated with the introduction of higher rates on additional properties in April 2016.
Comparison of the not-seasonally adjusted and seasonally adjusted data shows that activity in the residential housing market is strongest in the summer months with a clear low point around the end of the calendar year.
The seasonally adjusted estimate of the number of non-residential property transactions increased by 5.2% between October 2017 and November 2017, some 5% higher compared with the same month in 2016.
The non-residential property market has mirrored, to a large extent, the ups and downs of the residential market. The credit crunch effects from 2007 triggered a similar fall in transactions but not to quite the same extent as in the residential market.
Overall, the report says that the trend in non-residential property transactions has been that of a generally flat seasonal cycle between September 2010 and September 2013, but since then there has been a rising trend. Unlike the residential market, there have been no temporary tax reliefs or holidays in recent years to distort the underlying trend.
However, it also points out that the seasonal pattern of the non-residential series is much less pronounced than that of the residential market, although there tends to be a low point at the start of the calendar year, with a corresponding peak each March coinciding with the end of the financial year.
According to Stephen Wasserman, managing director of West One Loans, said that the figures show that the residential market is continuing to grow at a stable pace. ‘With last month’s Budget being significantly housing focussed, we will hopefully see the market continue on this trajectory in the next few months, as the outcome of the changes start to be seen,’ he said.
‘It has been a challenging year for the wider property sector, due in large part to the continual economic and political volatility but these figures are another positive indicator of the overall health of the market, and we are cautiously optimistic that this trend will continue in the New Year. The bridging sector in particular has seen a strong year with gross annual lending reaching £4.7 billion, eclipsing the pre-Brexit high,’ he added.