Although sale volumes for December were not as high as predicted, residential transactions did increase for the second month in a row, signalling a steady market throughout 2022
HMRC’s December residential transaction figures indicate a steadying market as the annual number of sales exceeds 1 million for the first time in a decade.
Figures show that the provisional non-seasonally adjusted estimate for December 2021 sales transactions is 113,470, 14.6% lower than December 2020 and 11.8% higher than November 2021.
Although sale volumes for December were not as high as initially predicted, residential transactions did increase for the second month in a row, signalling a steady market throughout 2022 and higher activity than pre-pandemic levels.
Andy Sommerville, Director at Search Acumen, commented: December’s transactions figures mark a solid end to what was an extremely fast paced and enormously busy 12 months. While transactions in December rose month-on-month, the rate of growth was slower which was expected for the final month of the year as people’s minds turned to Christmas and Covid-19 reared its head again.
2022 may be a comparatively quieter year in terms of transactions, but there will be no room for property lawyers to grow complacent. While the past two years have shown that predictions are not always easy to make, the headwinds going into 2022 point to a potentially less frenetic property market, but still operating at higher levels compared to the pre-pandemic period, he said.
Supply shortage will have a knock-on effect however, and due to the 2-3 month lag between sale agreements and completions, transaction figures are expected to dip in 2022.
Factors such as inflation and rising house prices, which according to latest ONS (Office for National Statistics) data have risen by £25,000 in a year, may also pose questions around affordability for borrowers and lenders. HSBC is already reportedly introducing stricter affordability tests for mortgage products due to the effects of inflation.
Richard Pike, Phoebus Software sales and marketing director, said: With the potential for another interest rate rise from the Bank of England in a couple of weeks there will be plenty of people looking to quickly secure themselves a decent longer term fixed rate. As we saw at the beginning of January, when NatWest reduced its rates, there are still deals to be had and now that inflation has passed the 5% mark, the question of affordability will be top of mind for anyone thinking of moving house.
He said: For lenders the same question will be as important as ever as house prices, according to the ONS this week, continue to rise unabated.
