According to seasonally adjusted HMRC figures, there were 97,600 residential property transactions in November, up 0.8% from October but 7.3% lower than November 2015.
However, the annual news is more positive – from January to November 2016 there were 1,135,810 transactions, compared with 1,119,480 for the same period in 2015.
While the figures for the last three months are provisional, this indicates that 2016 may be on a par with or slightly higher than 2015 on an annual basis.
Lower monthly transactions in the second half of the year have been balanced out by a booming first quarter, when transactions were rushed through ahead of changes to the Stamp Duty Threshold for owners of buy-to-let properties and second homes.
Releasing the statistics, HMRC said: “The large increase in transactions for March 2016 followed by the substantial reduction in April is likely to be associated with the introduction of the higher rates on additional properties in April 2016.
“However, whilst April and May 2016 are lower than the corresponding months in 2015, it should be noted that the total for Quarter 1 to Quarter 2 of 2016 is still substantially higher than the corresponding period last year.”
While this is true, the market would need to pick up significantly from its second half performance to continue the upwards trend in transactions next year.
Stephen Wasserman, managing director of West One Loans, said: “An increase in transactions for the second consecutive month is a positive indication that the property market is continuing to pick up. The appetite for property financing remains strong, despite the widespread economic turbulence which has shaped 2016.”
He added: “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.”
Wasserman said West One expects to see an increase in demand for short term finance, such as bridging loans. “We saw a landmark £55m in redemptions last month, showing a healthy level of property transactions in Q4 and suggesting we will witness a continued recovery in the coming months.”
“While purchasers look to stabilise property chains and snap-up new opportunities as they come to market, it’s crucial the industry works to boost the availability of competitive and suitable financing options to support the market’s ongoing recovery.”
Adrian Gill, executive director of Your Move and Reeds Rains said the slight monthly surge in transactions highlights ongoing buyer appetite but said a squeeze on affordability is putting pressure on first time buyers, who are finding it increasingly difficult to enter the market.
“The government’s recent announcement of a £1.4bn investment into the housing market, as well as the building of 40,000 new affordable homes, is welcome news towards addressing this issue. Hopefully this funding will start to make a real difference and we will see more buyers secure their dreams of home ownership,” he said.
Stephen Smith, director at Legal & General Housing Partnerships, agreed that action is needed, saying there is a supply and demand crisis in the market.
“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%, whereas the average wage in the capital has risen by only 1.7%.
He added: “Our nation’s housing shortage is a long term issue that requires a long term solution. 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.”