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Residential transactions up 2.6 per cent in March – HMRC

  • 21/04/2022
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Residential transactions up 2.6 per cent in March – HMRC
There were 114,650 residential transactions completed in the UK in March, a 2.6 per cent rise on February and a 35.7 per cent drop on activity during the same month last year.

The figures released by HMRC showed a continued trend of purchase demand in spite of the collateral caused by the pandemic, Ukraine war, and Brexit causing a rise in living costs and inflation.

The non-seasonally adjusted estimate of UK residential transactions in March 2022 was 110,990.

The adjusted 2021/2022 annual estimate currently stands at 1,374,050 residential transactions.

However, HMRC warned that the figures should be treated with a pinch of salt due to “significant forestalling observed in March 2021” in both land and buildings transaction tax (LBTT), and stamp duty (SDLT), as the stamp duty tax break and its various amendments caused spikes in activity throughout 2021.

The body attributed this forestalling to transactions scheduled to complete prior to the 3 March 2021 announcement as there was a rush to complete around the deadlines with a record 178,320 adjusted transactions.

It also observed “significant uncertainties” due to the pandemic and the impact of lockdowns on the property market, which has been affecting seasonal trends since April 2020.


A return to stability in spite of complications

Mark Harris, chief executive of SPF Private Clients, said: “Demand for mortgages is strong as rates remain competitive, even as swap rates continue to rise.

“Some heat has come out of the purchase market compared with this time last year which is welcome as that frenetic pace could not continue. Remortgaging activity is strong as borrowers attempt to lock into low mortgage rates before they disappear.”

Tomer Aboody, director of MT Finance, said the higher transactional volumes in March compared with February could be “the turning point when the market finally gets some stability and pricing normalises.”

He continued: “Volumes are much lower than March 2021, which is the reason why there has been such a significant increase in property values. The difference last year was that the stamp duty break encouraged many would-be sellers to get on and sell, suggesting that a revamp of stamp duty is needed to stimulate activity in the market.”


A golden opportunity for advisers

Kevin Roberts, director, Legal and General Mortgage Club, said: “Despite the pressure on borrowers caused by the rise in the cost of living, demand remains high and the overall outlook for the market is strong.

“The more complicated conditions mean that the role of advice is now more important. Borrowers may well need more support and reassurance, presenting an opportunity for advisers to really demonstrate the scope of their expertise and add value, during what will be a pivotal time for their clients.”

Jeremy Leaf, north London estate agent and former RICS residential chairman, said: “Transactions are usually a better measure of housing market health than more volatile prices – but not in this instance.

“These figures reflect sales which mainly took place a few months ago when activity was more lively. At the sharp end, we have noticed that since then the rising cost of living and interest rates, especially for those on tight budgets, are contributing to an easing of price growth and a drop in sales.

“Demand still comfortably exceeds supply and correctly-priced houses continue to attract considerable interest while mortgage repayments remain relatively affordable.”

HMRC noted that its estimates are based upon incomplete data as not all returns from completed transactions will have been received, with amendments due in coming months.

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