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February housing transactions fall but market resilient

Written by: Victoria Hartley
Residential housing transactions fell 0.7% last month ending four months of growth as affordability constraints and the lack of housing continue to grip the UK market.

The seasonally adjusted HMRC figures are lower than last year, but buyers’ rush to transact ahead of the March 2016 Stamp Duty changes from a slab to a slice tax system have skewed the figures, as in each of the last three years, the UK market has held steady at roughly 1.2 million annual residential completions from 2014 to 2016.

Shaun Church, director at Private Finance, said: “Taking into account the usual winter slowdown in housing activity, the start of the year saw property transactions remain comparatively high, albeit dipping slightly in February. Prior to January, transactions had not been so high since March 2016, when the spectre of Stamp Duty changes prompted an unusually large flurry of activity from second homebuyers and landlords. This lays solid foundations for the rest of 2017 as demand remains – for now – unhampered by external factors such as political uncertainty.”

The ONS house price index, also out today showed an annual price increase of 6.2% over the previous month in January, taking the average property value in the UK to £218,255.

Monthly house prices have risen by 0.8% since December 2016 with the East of England seeing the biggest average annual price increase of 9.3%. However, London saw the greatest monthly growth with a jump of 3% in January.

Spring rebound

Rob Weaver, director of investments at property crowdfunding platform Property Partner, said: “London property prices surged ahead in January with 3% growth but you need to take monthly volatility with a pinch of salt. December is always a quiet month for the housing market and it usually rebounds in the new year.

“Owners of flats in the capital though have fared the best with annual prices rising faster than houses – the average London apartment now costs more than £436,000 which is almost twice the price of a detached house in Wales.”

He added that the South East and South West have also experienced strong price growth of 2.4% and 1.9% respectively between Christmas and the first few weeks of 2017.

“But increasingly it appears the north-south divide has returned. The North East, in particular, is dragging behind the rest of the country, even suffering a fall in property prices alongside Yorkshire and The Humber in January,” said Weaver.

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