Transactions rather than prices reveal truth behind UK housing market

 

Property activity remains steady in the UK with transaction volumes changing very little in February compared to January and the previous year, while parts of the country have surpassed expectations.

The latest data from HMRC, which looks at completed sales transactions across the UK’s residential market, has revealed that the number of property sales completed in February was just 0.3% less than in January, from 101,350 to 101,010.

When compared to February 2017, this represents a slight fall from 101,710 transactions, indicating that despite the adverse conditions surrounding buyer and seller confidence and the political climate, the housing market has seen very little change in real terms.

According to north London estate agent and former RICS chairman Jeremy Leaf, housing market health is much better measured by looking at the number of actual house sales completed as opposed to monthly house price changes, as these can “fluctuate wildly” and are more easily skewed.

Better than expected

He added: “Numbers this month have not changed a great deal but reflect what we are finding on the ground, which is steady activity but no fireworks with buyers and sellers getting on with business, albeit at more realistic price levels.

“Hopefully, the encouraging figures on inflation and wage growth will reduce the squeeze on household expenses and encourage more buyers into the market in time for the traditionally busy spring season.”

There is currently a “two-tier” market in the UK, as described by Brian Murphy, head of lending for Mortgage Advice Bureau, which means that certain parts of the country are seeing significant, unexpected upturns which are supporting the more muted markets of London and the south-east – which is the opposite to what has been seen in the past.

With the north-west and Midlands seeing particularly strong housing markets at the moment, property sector speculators are likely to be feeling reassured by these figures with the forecast for 2018 remaining steady but positive – and it could even see better than expected performance.

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Transactions rather than prices reveal truth behind UK housing market

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