Residential property sales in the UK increased by 1.7% between January and February and were 2.7% higher than the same period in 2018, latest official figures show.
Non-residential sales increased by 6.7% month on month and 2.1% year on year while overall there were 101,780 residential and 10,650 non-residential transactions, according to the data from HMRC.
Aside from an increase in 2016, residential transactions in February have remained relatively stable over the previous five years and the HMRC data report points out that the fall in transactions starting at the end of 2007 coincided with the housing market slump and financial crisis.
Prior to this, transaction counts had risen steadily, peaking in the middle of 2006. The December 2009 peak for the seasonally adjusted estimate was associated with the end of the stamp duty ‘holiday’, during which the lower tax threshold was raised to £175,000. The peak in March 2016 is associated with the introduction of higher rates on additional properties in April 2016.
Sales are flat because many buyers, including home owners, are reluctant to move because of the uncertainty associated with Brexit, according to Kevin Roberts, director of the Legal & General Mortgage Club.
‘Innovation in the mortgage market is providing consumers with plenty of options to get onto and up the housing ladder today, including thousands more first time buyers, but we can’t ignore the fact that transaction levels have remained flat for some time now. For many homeowners, political uncertainty and the costs associated with moving are influencing them to adopt a wait and see approach,’ he said.
‘The measures we’ve seen from the Government over the last year to support first time buyers are to be welcomed, but getting our housing market on the move also means a helping hand for those higher up the ladder, particularly older home owners who want to downsize,’ he explained.
He believes that more needs to be done to get sales moving and argues that a stamp duty break or relief for last time buyers could help them to move to the smaller, more manageable properties many want and allow growing families to move up the ladder.
But Mike Scott, chief property analyst at online estate agent Yopa, said that the figures show how resilient the market is, especially as sales are up year on year, and also compared with 2017 and 2015.
Neil Knight, business development director of Spicerhaart Part Exchange and Assisted Move, believes that the supply of new homes needs to increase to boost the market. ‘I think the market will start to struggle if there are not enough new homes built. Because while overall construction grew this month, private new build housing was down,’ he said.
‘I think many developers are continuing to hold back until Brexit becomes clearer, while others are struggling to sell completed builds. The Government is still pushing for more construction, especially for affordable housing, and announced in the Spring Statement plans for more new housing. But, as the Government has failed to keep its 2016 pledge for 200,000 starter homes and with a Brexit delay it shall be interesting to see how the industry reacts,’ he added.