Residential transactions in February stood at 96,250 some 20.6% lower than February 2021 but 15.3% higher than January 2022, according to the latest official figures.
Meanwhile, non-residential transactions in February 2022 were 9,860, 10.2% higher than February 2021 and 17.4% higher than January 2022.
Tomer Aboody, director of property lender MT Finance, said: ‘Even though property prices continue to rise, transaction numbers have also ticked up compared with January as buyers can’t risk hanging around in order to secure their new home for fear of missing out.
“Many buyers are prepared to stretch themselves and pay record prices due to lack of supply, particularly while they can still take advantage of low mortgage rates.
“With global concerns such as Covid and the situation in Ukraine having a direct impact on western economies, Rishi Sunak must use his Spring Statement to look at ways to help curb soaring inflation and manage the rising cost of living.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Transactions picked up in February as the market ticked up a degree following the traditionally quieter January lull.
“Some heat has come out of the purchase market compared with last year but the remortgaging market is picking up as borrowers attempt to lock into low mortgage rates before they disappear.
“Increasing living costs, rising mortgage rates and higher taxes make for an unwelcome triple whammy which may put the brakes on the housing market unless the Chancellor comes up with a strategy to soften the blow in his Spring Statement.”
Further reaction
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“Transactions are a very important piece in the property jigsaw when it comes to assessing market health.
“These figures confirm why house prices have continued their inexorable rise, despite economic and other headwinds, not least tragic events in Ukraine.
“As we are finding in our offices, the momentum which began with the release of pent-up demand after lockdown restrictions relaxed shows little signs of abating and may even be on the rise, thanks to recent welcome additions in stock levels.”
Clare Beardmore, head of broker and propositions, Legal & General Mortgage Club :
“While house prices continue to surge, fuelled by a considerable mismatch between supply and demand, it is unsurprising that the number of transactions is beginning to adjust.
“The ongoing scarcity of supply has naturally curbed some of last year’s frenetic market activity, however, there are still plenty of buyers that are determined to press ahead with their purchase plans and take advantage of relatively modest interest rates, while they remain low.
“As the market settles into a new rhythm and we head towards another busy spring, the next few months could prove more complicated for borrowers.
“Household budgets are under significant strain, and the cost of living crisis is primed to deepen in April, with energy costs and national insurance contributions set to mount.
“Against that backdrop, the value of advice remains paramount. Advisers are well-placed to help prospective borrowers navigate a knock to their finances, and source a deal that is well aligned with their individual circumstances.”
Stuart Wilson, corporate marketing director, more2life:
“February saw the currently booming mortgage market keep going from strength to strength as house prices continued to rise.
“The later life lending market mirrored this activity as older homeowners look to capitalise on record property prices to unlock their housing equity and boost their retirement income in the face of increasing inflation and rising living costs.
“Indeed, recent data from the Equity Release Council shows that new customers accounted for 90% of equity release lending through 2021, which itself was a record year, and a trend which seems likely to continue as the UK faces difficult economic conditions.
“Whether it’s to manage rising energy bills, support family with house-buying aspirations or improve their financial security, retirees should explore the option of using the equity in their homes to their advantage.”
Stuart Wilson, corporate marketing director, more2life:
“February saw the currently booming mortgage market keep going from strength to strength as house prices continued to rise.
“The later life lending market mirrored this activity as older homeowners look to capitalise on record property prices to unlock their housing equity and boost their retirement income in the face of increasing inflation and rising living costs.
“Indeed, recent data from the Equity Release Council shows that new customers accounted for 90% of equity release lending through 2021, which itself was a record year, and a trend which seems likely to continue as the UK faces difficult economic conditions.
“Whether it’s to manage rising energy bills, support family with house-buying aspirations or improve their financial security, retirees should explore the option of using the equity in their homes to their advantage.”
Ross Boyd, founder of the always-on mortgage comparison platform,Dashly.com:
“Comparisons between February this year and last are like comparing apples with pears given the impact the Stamp Duty holiday had on transaction levels.
“There’s still life in the market, as shown by the fact transaction levels in February this year were up on January. Right now, transaction levels are being hindered by the sheer lack of supply.
“The lack of stock, coupled with the cost of living crisis, interest rate rises and impending tax hikes means transactions are likely to plateau during 2022.
“What we are seeing, though, is a lot of people using the increased equity they now have in their properties to secure competitive mortgage rates.
“In a growing number of cases, they are even paying early redemption charges to lock in now while rates are low as it can save them money.”
Andrew Montlake, managing director of the UK-wide independent mortgage broker, Coreco:
“The Stamp Duty holiday has massively skewed the data so it’s no surprise transaction levels in February this year were noticeably lower than the same month last year.
“The obscene lack of stock is also limiting the number of transactions. Moving forward, there are countless hurdles for households to clear in 2022, primarily rising interest rates and soaring inflation, so that will also apply a degree of downward pressure on transaction levels.
“However, rents are soaring and the desire of people to move out of the rental market will keep transaction levels ticking over.”
Robert Bolohan, aspiring first-time buyer and co-founder of translation agency, Lotuly:
“Oh to actually be able to buy a property in the current atrocious market. Each time we find one the prices are £30,000 to £40,000 above the asking price but you only get to know that when meeting the agent face-to-face.
“The massive lack of properties for sale makes it so hard for people like me to buy. We need a house and can afford one but find ourselves competing with landlords or other people buying their fourth or fifth property.
“There needs to be some sort of priority for first-time buyers, otherwise it will be frankly impossible for many of us to ever get onto the ladder.”
