UK residential sales down 2.8% month on month but up almost 10% year on year
Wed 24 Feb 2016
Residential property sales in the UK fell by 2.8% between December 2015 and January 2016, according to the
latest data published by HMRC, the UKs taxman.
However, the seasonally adjusted sales figure is 9.7% higher compared with the same month last year, with
transactions reaching 105,940.
Doug Crawford, chief executive officer of My Home Move, believes that it is significant than January sales are up
considerably year on year. This could be accredited to a spike in purchases by additional home buyers looking to
escape the rise in stamp duty, set to be introduced in April. This may continue to provide a short term boost for a
matter of weeks, he said.
However, we are now explaining to new clients that it is too late to guarantee completion before 01 April. Looking
ahead, the question is whether the market will sustain this level of activity. Supply is likely to be the biggest
constraint, so new house building will remain critical, he added.
However, the figures are published as property experts are being asked what effect the newly announced
referendum on the UKs position in the European Union might have on housing markets.
According to Peter Rollings, CEO of Marsh & Parsons, sales activity often cools in times of political uncertainty
and the London housing market usually bears the brunt of it. First and foremost, foreign investors may be more
tentative given this latest turn in events, especially as it follows hot on the heels of higher Stamp Duty for million
pound properties, he said.
But history shows us that the market recovered quickly from this short term ambiguity in 2015 and in fact, home
sales have really been building momentum over the past year. The property market is chock a block with eager
buyers, who are being propelled on by cheap mortgage finance and government support schemes, he explained.
Given the extent of buyer demand, its a great time for existing home owners to be thinking about their next step
up the ladder, which should drive further purchase activity. For investors, the change in Stamp Duty for second
homeowners in April will be an incentive to make purchases quickly over the next month, he added.
It remains to be seen how much of an impact the EU referendum will have on these current levels of confidence
but go or stay, London remains an attractive safe haven in times of uncertainty, he concluded.
According to real estate services firm Savills the fact that the referendum has been announced now means that
the relatively long lead in should minimise the potential impact on property market.
Weve already seen a number of short-term factors impact investors sentiment this year, however appetite for
UK property remains healthy. Chinese investors remain active in the market and negative interest rates in Japan
will also benefit global real estate, said Mark Ridley, Savills chief executive officer UK and Europe.
As we saw in the run up to the 2015 General Election, one of the biggest threats to the UK market can be
prolonged uncertainty. A referendum in June, whatever the outcome, will therefore offer investors security and
enable them to plan for the long term, he added.If the UK leaves the EU it could result in house prices dropping by 5%, according to Russell Quirk, chief
executive officer of online estate agent eMoov. A recent survey by the firm found 55% think that leaving the EU
would impact the value of their property with 34% believing it would rise and 21% thinking values would fall.
Quirk said that it wont necessarily be leaving the EU itself that could see house prices drop, but the uncertainty
amongst home owners and buyers as to what will happen next. Weve been part of the EU for over 40 years now,
so its understandable that such a momentous change will lead to uncertainty amongst the UK public, as to the
resulting implications an exit will have on them, he explained.
This air of uncertainty will lead to inaction amongst those looking to buy and sell and the resulting dwindle in
demand, will always lead to a reduction in house prices. We believe it could easily drop by 5% maybe more, so
the average UK home owner could see their property reduce by 11,000 in value, he pointed out.
Since we joined the EU the average UK house price has increased by more than 2,000%, but even just the
potential of an EU exit could start to slow the market. So the results of a yes vote on the main stage of the EU
could have a much larger impact on the UK as a whole, he added.