Property sales remain steady in September as housing market resilience continues: HMRC

UK residential property transactions remained level with August at 112,370, but are down by 32% compared to September 2021, the latest HMRC statistics show.

September 2021's figures were artificially inflated by the end of the temporary stamp duty holiday which came into force during the Covid-19 pandemic.

John Phillips, national operations director at Just Mortgages, said: “It’s important to recognise that a year-on-year comparison is still something of an anomaly due to the stamp duty holidays creating transaction peaks so it’s more telling to recognise that transactions levels are largely the same as pre-covid.

"Despite the housing market being in the grip of what many will consider the perfect storm of high inflation, rising rates and housing budgets stretched with the cost-of-living crisis the mortgage market once again showed its resilience. UK average house prices increased by 13.6% over the year to August 2022 and this latest data shows that housing transactions maintained the same levels as the previous month.

"Housing stock is still outstripping demand and the housing sector had a shot in the arm with favourable changes to stamp duty so although customers may be paying higher mortgage rates than they are used to, the appetite to borrow is still there.

"However, what continues to be concerning is extended completion times that are around 22 weeks. This creates a significant window of opportunity for housing chains to break and mortgage offers to expire which creates stress for borrowers and makes the provision of professional mortgage advice more important than ever.”

Mike Scott, chief analyst at national estate agency Yopa, commented: "HMRC figures for the number of homes sold in September show that the housing market remained strong in the period. The number of sales was well down on September last year, but that figure was artificially inflated by people rushing to complete their purchase in time to beat the final deadline for the stamp duty holiday. The number was 3.9% higher than in September 2019, the most recent month that is truly comparable.

"These figures relate to sales that were agreed earlier in the year, but they do show that the housing market continued to show surprising resilience in the face of the rising cost of living and other economic pressures. Yopa expects that this resilience will continue into 2023, and that while house price growth is likely to slow down or even stand still, significant falls in house prices are unlikely as long as unemployment remains low and mortgage lenders continue to lend, although at higher interest rates".

Simon Webb, managing director of capital markets and finance at LiveMore, added: “The demand for home buying is still strong but steady as evidenced by September’s housing transactions data remaining the same as the previous month.

“The large annual drop of 32% (non-seasonal figures) and 37% (seasonal) is due to the ending of the stamp duty holiday last September when buyers surged to get their transactions over the line before the deadline closed.

“We would expect the housing market to start cooling as mortgages rates are rising fast and the cost-of-living crisis puts a strain on people’s finances. To add to this financial pressure, the Bank of England is expected to raise the base rate again next week to try to curb inflation, with the market expecting an increase as much as 1%.

Demand however, is still there, despite house prices continuing to rise, albeit at a slower growth rate than last year when the market was fuelled by the stamp duty holiday. The recently announced stamp duty change could also prop up the market for homes under £500,000. The bottom line is a shortage of houses for sale and not enough new property is being built fast enough to keep up with demand.”