Property sales slide but remain above pre-pandemic levels - HMRC

Property transactions dipped in October but remain above pre-pandemic levels, HMRC data shows.

The latest property transactions report from the taxman - based on Stamp Duty returns - estimates that there were 110,850 UK home sales in October 2022 on a non-seasonally adjusted basis.

That is up 29% annually, albeit compared with the end of the 2021 Stamp Duty holiday – and down 3% on a monthly basis.

The figure is up 38% annually on a seasonally adjusted basis and rose 2% over the month to 108,480.

HMRC’s report highlights that annual comparisons are skewed by last year's Stamp Duty holiday and it also points out that it would be too early for higher mortgage rates to be reflected in its data.

The 110,850 figure is also lower than the 121,740 reported in October 2020, which was during the Stamp Duty holiday, but is higher than the 107,100 sales recorded by HMRC for the same month in 2019.

HMRC data shows that the number of sales in October between 2017-2019 was typically around 107,000 to 109,000.

Commenting on the data, Nick Leeming, chairman of Jackson-Stops, said: “One of the main concerns during a recession is the expected drop in transactional volume, however unlike previous economic downturns, our housing market remains underpinned by a fundamental supply crisis, keeping demand buoyed and making the fear of a cliff-edge fall highly unlikely. 

“With wider fiscal markets now stabilising from Trussonomics, mortgage rates are also falling which may take the brakes off some peoples planned home moves. 

“As evident in the figures, property transaction volumes remain steady, and this pattern is reflected in our own national branch data in which completions are on par with October last year - a time of notable market boom - with a healthy number of exchanges, completions and offers in the pipeline as we reach the Christmas milestone.”

He said a seasonal dip is not unexpected this time of year, adding: “It will be a slow burner as we watch the character of the housing market shift to a new normal, and one that looks brighter than it did some weeks ago with markets responding well to Rishi’s new fiscal constraint.

“For anyone reliant on borrowing to fund their house purchase, the pressure to complete might feel twice as high, and transactional delays twice as frustrating, but the message is that mortgage rates should continue to edge downwards in the coming months as more products are released to market.”

Matthew Thompson, head of sales at Chestertons, added: “Despite economic uncertainty, buyer demand was undeterred as our branches registered the same volume of enquiries as in October 2021. 

“This shows that, compared to the national picture, London’s property market has its very own rhythm and remains a key destination for buyers and investors alike.

"Whilst buyers appeared highly motivated, many would-be sellers waited for more economic and political certainty before putting their properties on the market. Chestertons noticed a 34% drop in the number of market appraisals carried out in October compared to September.

“This pause for breath is likely to cause a shortage of new properties coming onto the market in the New Year.”

It comes as research from property data company TwentyCi shows there are currently 407,956 properties listed for sale across the UK, up 0.53% compared with November 2019.

However, the firm said the majority of regions have seen a decline in listings.

Currently, there are 289,040 properties across the UK with sales agreed, down 4.55% on November 2019.

TwentyCi’s analysis suggested this was to be expected due to rising living costs and high mortgage rates.

Meanwhile, in the three months to November, there have been 277,594 contract completions across the UK.

That figure is 8.76% higher than the same period in 2019. 

TwentyCi said: “It’s likely that completions have been brought forward to secure lower mortgage rates that had been agreed upon at an earlier date.

“With this in mind, the end of 2022 will be a telling time in terms of the impact current mortgage rates are having on the market as a whole.”