Data released today by HMRC is throwing further light onto the housing market and adds weight to suggestions that it is cooling off post the inception of the MMR.
The research shows that between April and May property transactions fell by 3.5 per cent, since the introduction of the new mortgage market rules on 26 April.
However, transaction levels are still high, according to HMRC’s UK Property Transaction Statistics. According to the research levels are 14.8 per cent higher than compared to this time last year.
This follows research earlier this month by the Royal Institution of Chartered Surveyors revealing that lending restrictions introduced under new mortgage market rules are beginning to reduce the number of approvals and could even begin to stem price inflation.
Rics data revealed that the national supply of new homes coming onto the market declined for the fifth consecutive month in May and in London, where fears of an overheating market have been particularly expressed, demand for new homes fell for the first time since June 2012.
Elsewhere in the HMRC research, the seasonally-adjusted UK property transaction count for May 2014 was 99,320 residential and 8,800 non-residential transactions.
The report said: “Recent non-seasonally-adjusted transactions peaked in November 2013, the highest level since November 2007, then steadily declined until February 2014, after which there has been a gradual increase.”
Interestingly, data compiled by HMRC on the non-residential property market has largely mirrored the ups and downs of the residential market over recent years.
The report said: “The credit crunch effects from 2007 triggered a similar fall in transactions but not to quite the same extent as in the residential market.
“The trend in non-residential property transactions has been that of a generally flat seasonal cycle between September 2010 and September 2013, but since then there has been a rising trend.
“Unlike the residential market, there have been no temporary tax reliefs or ‘holidays’ in recent years to distort the underlying trend.”
Pressure has been mounting for the Bank of England to step in an use some of its policy levers to contain the housing market, after Sir Jon Cunliffe, deputy governor, said last month that it would step in if the MMR failed to contain inflation.
