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Property sales continue to rise despite cost of living crunch - HMRC

The number of property transactions continues to rise despite the cost of living crisis and remain higher than pre-pandemic levels, HMRC data shows.

Provisional figures from the taxman show there were 100,870 UK residential transactions on a non-seasonally adjusted basis in May 2022, down 2% annually but 1.6% higher on a monthly basis.

The provisional seasonally adjusted estimate of UK residential transactions in May 2022 is 109,210, 5.1% lower than May 2021 and 1.3% higher than April 2022.

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It is hard to make an accurate annual comparison as the market was boosted by the stamp duty holiday last year but the figure, based on stamp duty payments to the taxman, is still higher compared with previous years.

HMRC registered 97,040 residential transactions on a non-seasonally adjusted basis in May 2019 and 96,500 on a seasonally-adjusted basis.
 

However, Jeremy Leaf, north London estate agent and a former RICS residential chairman, said it could still take a few months for the economic conditions to be reflected in property sales.

He said: “Transactions, which are probably a better measure of market health than more volatile prices, are often the last to reflect change. 

“The protracted period between the date a sale is agreed and completion means we can wait several months to notice something is up.

“Previous falls in sale numbers could partly have been blamed on shortage of stock but we are now finding, at the sharp end, a softening in demand prompted principally by the rise in inflation, as well as uncertainty as to when it will end.

“That lack of choice, combined with low unemployment and rising wages, mean no major corrections are expected.”

Nick Leeming, chairman of Jackson-Stops, added: “The latest HMRC property transaction data is a clear indication of a market with no real signs of slowing – at least for now. UK residential transactions for May 2022 are 1.6% higher than the previous month, reflecting both the usual spring bounce as well as the sustained backlog of pent-up demand.

"Momentum has yet to run its course.

"By historic standards, borrowing remains cheap and today’s interest rate of 1.25% is still far lower than the historic average of 7% between 1970 and 2022.

"House prices continue to show growth month on month, albeit at a gentler rate than the record boom of the last 6 months. While the going is good, people are moving. Jackson-Stops UK branch data shows an equally high level of activity across the board month-on-month for May, with a 31% increase in offers received and a 23% increase in new instructions."

https://www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above/uk-monthly-property-transactions-commentary#uk-residential-transactions

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