Property sales dip just 3% in December: HMRC

UK residential transactions totalled 108,960 in December, 1% lower than December 2021 and 3% lower than November, according to the latest HMRC statistics.

On a seasonally adjusted basis, sales were 1% higher than December 2021 and 3% lower than November.

Avinav Nigam, cofounder of real estate investment platform, IMMO, commented: "Transactions were down by 3% in December compared with November, with a key driver of this being higher borrowing costs, since interest rates have been increased to curb higher inflation. Affordability checks from lenders are harder to pass. The impact of this is not felt uniformly. The people who suffer most are younger and poorer people renting now, and aspiring to home ownership. These people need quality, energy efficient, safe rental homes more than ever.

"There is an opportunity for professional investors to step in and re-capitalise the market, upgrade the quality and energy performance of existing housing, benefitting the people and their communities who still need a place to call home."

Kay Westgarth, head of sales at Standard Life Home Finance, said: “As we step into the new year, today’s data from HMRC is an opportunity to reflect on a healthy, albeit sometimes challenging, year for the UK property market. Despite turbulent conditions, the market remains robust and has kept a level heading overall.

“While activity did slow in December, it has traditionally been a sluggish month for the housing market due to the Christmas period. That said, following the mini budget, homeowners are cautious as the cost-of-living crisis continues to dominate headlines amid concerns about a house price correction.

“While the signs are largely positive for the months ahead, the industry is adjusting to a higher interest rate environment which will impact individual borrowers differently. Older borrowers who are currently on their lenders SVR due to affordability issues are likely to be feeling the pinch and they need to speak to an adviser who can discuss all the financial options available.

“Only by considering all the available options will advisers’ clients be able to find the right one for their individual circumstances, both now and in the future.”

Emma Cox, MD of real estate at Shawbrook, commented: “It was a silent night for property transactions in December, as homebuyers put off purchasing activity during the festive period. While December often sees a slowdown, with prices predicted to continue to fall in the first half of the year many in the market will be hoping the new year brings with it a renewed burst of activity as buyers look to secure deals. Mortgage rates, while still higher than this time last year, are beginning to come down, giving the market a renewed sense of optimism for the year to come.

“Competition will likely remain fierce among investors, many of whom will be looking to add to their portfolios this year, and buyers will need to keep their wits about them when signs of price growth return to the market.”

Conor Murphy, CEO and Founder of Smartr365, added: “Rates continued to fall in December and into the new year after having peaked in November. We are now back in a competitive and well-priced market, which should help stoke demand.

“Product withdrawals have also thankfully settled and there are more lenders in the market now than at this time last year, encouraging greater competition on pricing and innovation of products and policy. Lenders also remain keen to add to their loan books, rounding off a range of reasons to be optimistic for the year ahead.

“As we edge closer to the annual spring bounce, lenders should look to invest in their back-end processes to make the most of the busier period. Consumers expect a seamless, digital homebuying journey, and the onus is on us to provide it.”