HMRC Reports Annual Residential Transaction Increase of 29%

The latest official figures from HM Revenue & Customs (HMRC) indicate that residential transactions in the UK grew by 29% annually to reach 110,850 in October 2022. Meanwhile, non-residential transactions in the UK for October were down by 5% compared to the same time last year, totalling 9,940 transactions.

In its online publication, HMRC stated that current monthly property transaction levels are similar to those recorded at the end of 2019, prior to the COVID-19 crisis.

Key details published by HMRC include the following:

• The provisional non-seasonally adjusted estimate of UK residential transactions in October 2022 is 110,850, 29% higher than October 2021 and 3% lower than September 2022.
• The provisional seasonally adjusted estimate of UK residential transactions in October 2022 is 108,480, 38% higher than October 2021 and 2% higher than September 2022.
• The provisional non-seasonally adjusted estimate of UK non-residential transactions in October 2022 is 9,940, 5% lower than October 2021 and 3% lower than September 2022.
• The provisional seasonally adjusted estimate of UK non-residential transactions in October 2022 is 10,110, 1% lower than October 2021 and 2% higher than September 2022.

Source: HMRC

However, some experts have said that the figures quoted are not in line with the ‘economic reality’ of the bigger picture the UK is facing right now.

“On the frontlines, it’s now a very different story,” commented Lewis Shaw, founder of Teesside-based Riverside Mortgages.

“The phones have stopped ringing, buyers are holding off, and with the World Cup and Christmas upon us, most people have decided to sit tight and wait until next year.”

“That said, I still think the doom-mongers will be proved wrong and that a reduction of 10% to 15% in asking prices merely takes us back to pre-COVID levels, and as long as you’re able to negotiate a price reduction along the chain, I’d say most people should get on with it as it becomes a zero-sum game.”

A gradual return to normality

Speaking on behalf of mortgage broker Coreco, managing director Andrew Montlake said that even though the data published by HMRC does not take into account the economic turbulence of the past couple of months, transaction levels are indeed beginning to head back to some level of normality.

“The fact that the mortgage market has now stabilised and that rates are not set to peak as high as we thought has brought some confidence back into the market, despite the predicted long recession that lies ahead,” he said.

“After two years of surreal house price growth, some froth had to come off the market, and that will drive transaction levels rather than destroy them.”

Elsewhere, chief executive at later life lending platform Air, Stuart Wilson, said that the figures came as no real surprise to those who have been monitoring activity on the UK real estate market.

“Rising interest rates and soaring inflation have all contributed to a challenging climate; however, the robustness of the UK housing market should not be underestimated,” he said.

“Indeed, UK residential transactions have shown their typical stability in recent months and have remained at levels comparable to late 2019, before the pandemic.”

“While economic data like this is an indication of market trends, we should not lose focus on the reality faced by advisers and their clients every day.”

“Advisers need to be actively seeking to speak to clients about their options and helping them to understand that it is less about the headlines and more about what is right for their individual circumstances now and in the future.”