Sales of residential properties in the UK increased by 0.8% in November while commercial transactions were up by 5.1%, the latest published data shows.
However, the monthly sales of homes was down 7.3% compared to November last year, according to the figures from HMRC.
The HMRC report also say that a large increase in sales in March 2016 followed by the substantial reduction recorded in April is likely to be associated with the introduction of extra stamp duty on additional properties in April 2016.
However, whilst April and May 2016 are lower than the corresponding months in 2015, it should be noted that the total for the first to second quarters of 2016 is still substantially higher than the corresponding period in 2015.
HMRC, which gathers information on property tax paid on the sale of homes, also says that non-tax factors may have played a role as well, for example the Bank of England’s plans to curb on buy to let mortgages resulting in a rush to purchase before April 2016, and the European Union referendum affecting transactions in recent months.
Stephen Wasserman, managing director of West One Loans, pointed out that it is the second month in a row when sales increased. ‘The appetite for property financing remains strong, despite the widespread economic turbulence which has shaped 2016. Certainly, with divided opinion across the sector and mixed messages filtering through, there is little consensus for investors as to the state of the UK property market as the year ends,’ he said.
‘However, we remain optimistic for 2017’s prospects, and anticipate many home buyers, buy to let and second home buyers will continue to emerge. As a result, we can expect to see an increase in demand for short term finance, such as bridging loans, where transaction volumes are particularly important for the borrower’s exit strategy,’ he explained.
He added that it is important for the lending industry works to boost the availability of competitive and suitable financing options to support the market’s ongoing recovery.
The figures make it clear that 2016 was an unusual year for property markets, according to Doug Crawford, chief executive officer of My Home Move, with changes to stamp duty resulting in a huge amount of transactions being brought forward into the first quarter, and an unexpected result in the EU referendum and subsequent uncertainty bred caution.
‘Despite this, transaction levels have held up well in recent months and the slight increase in transaction numbers between October and November is encouraging. While volumes are lower than they were a year ago, the gap has narrowed from being 9% lower than a year ago in October to 7% lower in November,’ he pointed out.
‘The market is well placed to keep growing as we look to 2017. Since the referendum, transaction levels have remained stable largely, which shows that the fundamentals in terms of supply and demand mean the market will weather any further macroeconomic uncertainty,’ he added.
‘In the long term, demand for both rented and owner occupied accommodation will support price prices and sales volumes. There will undoubtedly be challenges for the market over the next 12 months, with the triggering of Article 50 and changes to landlords’ tax relief looming on the horizon. However, the property market has shown it is more than strong enough to overcome these obstacles,’ he concluded.
