Property transactions in November fell 7.3% compared to the same month last year, according to new statistics just released by HMRC.
The figures show that there were 97,600 residential property transactions in November, which was a 0.8% increase on October but a 7.3% drop year-on-year.
Over the year, March saw the largest increase in property transactions, followed by a steep drop in transactions in April. This has been explained by the introduction of the stamp duty land tax surcharge on second homes and buy to let properties.
While year-on-year April and May were significantly down on 2015, the figures reveal that Q1 and Q2 2016 were much higher that the corresponding period in 2015.
March 2016 was a record month, with the highest number of transactions recorded for ten years.
Overall, the total seasonally adjusted number of transactions for the year to November 2016 was 1,322,060, as opposed to 1,199,780 in the same period the year before.
Stating that an increase in transactions for the second consecutive month is a positive indication that the property market is continuing to pick up, Stephen Wasserman, managing director of West One Loans, said:
“The appetite for property financing remains strong, despite the widespread economic turbulence which has shaped 2016. Certainly, with divided opinion across the sector and mixed messages filtering through, there is little consensus for investors as to the state of the UK property market as the year ends.
“However, we remain optimistic for 2017’s prospects, and anticipate many home buyers, buy to let and second home buyers will continue to emerge.”
Stephen Smith, housing partnerships director at Legal and General believes the figures point to a supply and demand crisis in the housing market.
“Although we have seen a slight rise in property transactions this month, house purchases remain significantly down on last year.”
“An ongoing lack of supply in our housing market is key to this, pushing up house prices and forcing many first time buyers out of the market. Throughout the past year, average house prices in London have increased by 7.6 per cent, whereas the average wage in the capital has risen by only 1.7 per cent.
“Our nation’s housing shortage is a long term issue that requires a long term solution. Looking towards the New Year, the Government needs to prioritise rebuilding this essential sector by implementing innovative house building initiatives and following through on its pledge of building one million homes by 2020, if not more.
Only then can we be confident that we will see a positive, lasting impact on our housing market.”
You may also be interested in:
How the restriction of relief on BTL mortgage interest will affect landlords
Simon Whittaker, Finance Director analyses and examples of how the restriction of relief on buy to let mortgage interest will affect landlords.
More lenders change their rental cover requirements
Mainstream lender, Santander, announced that it is moving its rental coverage requirements upwards in response to forthcoming affordability assessment changes required by the Prudential Regulation Authority.
How the new buy to let underwriting standards will affect lenders and borrowers
Steve gives his views on what the implications of tougher interest cover ratios and increased background checks will mean for landlords and buy to let lenders.
22nd December 2016