Residential property transactions stood at 114,200 in November 2022, 12% higher than November 2021 and 4% higher than October 2022, the latest figures from HMRC show.
During the same period non-residential transactions totalled 10,550, 2% lower than last year but 12% higher than October 2022.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Transaction numbers are holding up, particularly as we would expect things to start to slow down as we approach Christmas.
“Buyers with good mortgage offers are keen to complete before they expire, while others have to move for whatever reason, even if the market is more difficult than it has been.
“Even though the Bank of England hiked the base rate by half a point as expected last week, fixed-rate mortgages continue to move gently downwards, with 5-year fixes breaching the 4.5 per cent barrier and expected to go below 4% in the new year as the cost of funds falls, servicing pressure subsides and lenders attempt to originate new business.
“For some borrowers, a base-rate tracker with no early repayment charges is a better alternative until fixed-rate pricing comes down further.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “As usual, it is transactions which are the better measure of market health than more volatile property prices.
“In fact, prices have held up better than we might have feared given recent cost-of-living and mortgage rate uncertainty.
“Although these transaction figures are a little dated, reflecting what happened a few months ago, activity is clearly recovering from the shock of the mini-Budget a few months ago now that rates have begun to settle.
“Many buyers will be contemplating their next moves over the festive break and recent pick-up in enquires will mean that figures will probably continue on a better-than-expected course into the new year.”
Further reaction
Kay Westgarth, sales director at Standard Life Home Finance:
“After a complex year economically, nobody can dispute that the soaring cost of living and spiralling interest rates are pinching household incomes. However, today’s figures show another indisputable fact: that the UK housing market has kept a level heading in choppy waters, with property transactions slightly elevated compared to last month.
“During this cost-of-living crisis, it’s important to remember what these HMRC figures will mean for advisers and clients on a practical level. For the over 55’s in particular, many of whom will be feeling pressure in the current economic climate, it is essential that advisers discuss all financial options available to their clients and their individual circumstances, including equity release where appropriate.
“The average homeowner wants personalised guidance and peace of mind. As rates drop and house prices remain higher than this time last year, the use of equity release as a tool for managing finances will continue to be a topic of interest to many.”
Charlotte Nixon, mortgage expert at Quilter:
“The cost-of-living crisis is still yet to take a real toll on the property market, as the number of monthly property transactions has not yet started to tail off as had been expected. The provisional seasonally adjusted estimate of UK residential transactions in November 2022 is 107,190, 13% higher than November 2021, though less than 1% higher than October 2022.
“While property transactions are yet to fall, they are certainly beginning to slow. A fall in house prices is widely anticipated for next year – Nationwide just yesterday shared its prediction that house prices could lower by 5% in 2023 – and slowing property transactions is likely the first sign that this could materialise as reduced demand goes hand in hand with reduced prices.
“The Bank of England has now hiked its Base Rate to 3.5%, which will have a knock-on effect on mortgage rates – primarily for those on variable rate mortgages. As such, more people may opt to hold off on purchasing a home as the monthly costs rise and become that much more unaffordable, which will only further reduce demand.
“The Government has now announced that its 95% mortgage guarantee scheme will be extended by a year, which should help first-time buyers purchase their first home amid a very trying time.
“This extension, coupled with the changes made to Stamp Duty at the mini-Budget in September, could keep property transactions at a higher level than they might otherwise have been. However, given the high level of mortgage rates and soaring everyday costs, we are still likely to see a dip as we head into 2023.”
Stuart Wilson, chairman of Air Club:
“Rising interest rates and soaring inflation continue to contribute toward a challenging economic climate for both advisers and their clients, with industries across the board feeling the impact. However, today’s HMRC figures show that the UK housing market is still remarkably robust and figures have slightly increased compared to October’s data.
“Indeed, residential property transactions have even stayed stable at a level comparable to the market pre-pandemic – an impressive feat given the challenges that face many advisers and their clients every day. As we head towards the end of the year and increasing numbers of customers seek to transact with offers from the “post mini-Budget” paradigm, lenders will need to be more innovative and flexible than before.
“Just because affordability has fallen and interest rates have risen doesn’t mean that people do not continue to hold the ambition of owning their own home and we expect to see more reliance on the “bank of mum and dad” supported by finance from the wider later life lending industry.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“The property market remains buoyant, with the number of properties being sold increasing, despite the wider economic troubles.
“There has been a rush for many buyers to complete in recent months, as fears of any changes to mortgage offers and further interest rate rises made people eager to sign on the dotted line while they could.
“The overall picture remains mixed as we finish the year, as house prices are expected to fall, but that readjustment could spur demand, as buyers search for a good deal.
“Mortgage affordability is one of the biggest stumbling blocks for first-time buyers at the moment, as it is difficult for them to get on the ladder without knowing if they can afford to keep up with the repayments as food, household goods and energy soar.”
Gareth Lewis, commercial director of property lender MT Finance:
“Despite many wider economic challenges, consumers seemingly still want to buy property and move up the housing ladder.
“While this was a fairly simple process in a low interest rate environment, this has changed with consumers needing to get accustomed to higher mortgage rates, as well as the soaring cost of living.
“The effect of these and whether they will negatively impact transaction levels, as well as people’s desire to move, has yet to be seen in the official numbers. Only the new year will reveal whether that is the case.”
