Property transactions off to a slow start

Property transactions off to a slow start

Property transaction figures have shown a slow start to 2019, with an increase of just 0.8 per cent in January. 

The latest HMRC data reported 101,170 properties transacted in the first month of the year, up 0.8 per cent on December 2018 and 1.3 per cent when compared with January 2018. 

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: "Transactions are always a better barometer of market sentiment than house prices, which tend to fluctuate month by month.

"These numbers reflect what we have been seeing on the ground - that buyers are cautious and sellers reluctant to make significant reductions. Yet there is no sign of any major corrections in the market, even though sales are harder to negotiate and taking longer to complete." 

Mr Leaf anticipated seeing signs of pent-up demand when political and economic uncertainty have started to reduce.

Meanwhile January also recorded a monthly rise of 0.2 per cent in the number of non-residential property transactions.

On an annual basis these transactions increased by 2.4 per cent.

Kevin Roberts, director, Legal and General Mortgage Club, said: "Competition in the mortgage market is high, but transaction levels remain flat. Political uncertainty and financial barriers such as stamp duty are still influencing some homeowners to improve not move.

"Although it’s great to see that the number of first-time buyer mortgages is at a 12-year high, we also need to see more initiatives for those higher up the property ladder."

He suggested one solution would be to extend the stamp duty exemption to last-time buyers.

"This would free up larger properties for growing families and allow younger homebuyers to move onto or up the property ladder," he said.

Steve Seal, director of sales and marketing at Bluestone Mortgages, added: "Today’s figures show the sluggish nature of property transactions. Monthly peaks and troughs fail to disguise the lack of housing, rendering the market inaccessible to some aspiring homeowners.  

"While house prices are rising at a more steady rate - the rising cost of living is preventing many borrowers from saving for both a deposit and funds for a rainy day. It’s usually either/or, and the majority struggle to save for the latter. As a result, many see their credit history suffer should an unexpected illness, bill or payment occur."

He added: "As an industry, we need to ensure these borrowers are provided with the support they need in navigating their way through life’s challenges and still achieving their homeownership ambitions."