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HMRC figures indicate stable residential transactions while buyers benefit from low rates

  • 24/09/2019
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HMRC figures indicate stable residential transactions while buyers benefit from low rates
Residential transactions have remained largely stable in the face of the UK’s potential exit from the EU, while low mortgage rates have pushed more buyers with smaller deposits into the mortgage arena.


HMRC property transaction figures

Residential transactions slowed in August falling by 0.9 percent reflecting pre-Brexit trepidation, according to the latest HM Revenue & Customs (HMRC) property transaction figures.

Despite the fall, the 99,890 residential transactions reported last month was actually a monthly increase of 15.8 per cent.

Non-seasonally adjusted residential transactions in August 2019 were approximately 0.4 per cent lower than August 2018.

Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: “Transaction numbers remained fairly subdued in August on a year-on-year basis, despite HMRC showing a significant fluctuation compared with July.

“But a steady market is what you would expect for the time of year – with the added spectre of Brexit looming, buyers and sellers didn’t have to look far for an excuse not to do anything but sit on their hands.

“Business has picked up as we have moved into the autumn with people coming back from their holidays more willing to get on with things.

“Lenders are still competing fiercely for a relatively modest pool of business, so rates remain cheap. Borrowers still have lots of choice, even if supermarket banks, such as Sainsbury’s and Tesco, are pulling out of the lending market.”

Joshua Elash, director of property lender MT Finance, added that there was a clear need for a finalisation of Britain’s exit from the EU, or a boost for buyers through stamp duty reform. 

He said: “Residential transactional volumes are down year-on-year as the sector continues to suffer from an overly-aggressive stamp duty regime and broader macro-economic uncertainty.

“The market needs a catalyst in the form of either visibility on the Brexit end-game or stimulus in the form of stamp duty reform.

“This is evidenced by the contrasting increase in volumes in commercial property, which is subject to different stamp duty levies.

“If HMRC wants to generate greater revenues, it needs to encourage greater transactional volumes by reforming or rolling back the stamp duty regime on residential property.”


Mortgage Monitor  

The current low-rate mortgage culture coupled with stalled house price growth has helped boost the number of mortgages approved to buyers with small deposits, according to the latest Mortgage Monitor information released by chartered surveyors e.surv. 

It found that 66,059 residential mortgages were approved during August 2019 in seasonally adjusted figures. 

This was 1.9 per cent lower than July, however, marginally up compared to August 2018, rising 0.1 per cent year-on-year. 

The survey found that although some parts of the market have slowed, the number of first-time buyers has remained buoyant in the last 12 months. 

Low mortgage interest rates and more affordable house prices have helped a greater number of first-time buyers onto the ladder than previously. 

Correspondingly, small-deposit borrowers increased market share from 27.9 per cent in July to 28.3 per cent this month. 

This share was ahead of the 27.7 per cent recorded in May and June. 

Richard Sexton, director at e.surv, said: “While mortgage rates have ticked up in the last couple of years, more recently deals have started to become cheaper. 

“Swap rates, which are used by lenders to help price mortgage rates, have fallen, with lenders passing on these lower funding costs to consumers. 

“The outcome has been a new wave of cut-price deals, which have tempted homeowners and first-time buyers to market.”


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