Housing transactions ‘show no sign of Brexit slowdown’

UK residential transactions maintained their annual level of 1.2m last year, data from HMRC reveals. The total seasonally-adjusted transactions, seen by analysts as an indication of home buys, fell by just 2% in the 2018 calendar year. The total was bolstered by a strong end to the year, with transactions in both November and December overtaking 2017 totals, outpacing analyst expectations. In December there were 102,330 residential transactions, up by 3.6% on the previous year. Stronger than expected Residential analyst Neal Hudson said: “It was stronger than expected and it will be interesting to see if that can continue into the new year. So far, there’s not really any data suggesting a Brexit slowdown, other than the RICS sentiment survey.” The December market survey from the RICS, released this week, pointed to dwindling national sales volumes, with new buyer enquiries down by 17% in December, and sales predicted to drop by 28% in the next three months. Simon Rubinson, RICS chief economist, said: “Even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued. This is also very clearly reflected in a worsening trend in near-term sales expectations. “There is some comfort provided by the suggestion that transactions nationally should stabilise as some of the [Brexit] fog lifts, but that moment feels a way off.” Despite Brexit buyer caution, annual transactions have remained around 1.2m for the past five years. Hudson said: “There has not been a lot of change at the national level, but in five years there has been quite a lot of change within those 1.2m transactions.” Increase in first-time buyers He noted a decrease in buy-to-let activity following 2016 tax relief changes, and an increase in first-time buyers who have become “much more dominant”. It follows a sharp decline with the market slump in 2007. Transactions before this period peaked at around 150,000 per month, and a pick-up in 2012 has brought transactions to around two-thirds of this level, with little change in recent years. Neil Knight, Spicerhaart Part Exchange & Assisted Move business development director, said: “When you bring new housing into the picture, it is clear that activity is very much on the up. In fact, construction output hit an all-time high in November 2018. More houses being built All new construction work was up by 3.4%, with new housing up by 4.9% and total output exceeding £14bn for the first time since records began in 2010, according to construction figures from the Office for National Statistics. Knight said: “This suggests that while Brexit uncertainty may be having an effect on transactions in terms of those who maybe want to move but don’t need to, new housing is still very much needed for those who have to move or are looking to make their first step onto the housing ladder.” Hudson added: “First-time buyers are doing quite well at getting into the market now, compared to five years ago, but we haven’t seen much of an improvement at all in mortgaged home-movers. The market is still not working efficiently for everyone.” To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette