The number of residential property transactions stayed flat in January, according to HM Revenue & Customs.
HMRC’s latest monthly housing data shows that on a seasonally-adjusted basis there were 102,610 housing transactions in January.
This is 0.1 per cent lower than the number of transactions record in January last year (102,720), and only a marginal 1.3 per cent increase on December’s figures.
The monthly number of property transactions has remained remarkably stable throughout 2017. The highest figure recorded was in March 2017, at 103,570 transactions – with the lowest being December’s figure of 101,250.
But there were more positive signs that first-time buyers were returning to the market, with the number of new buyers taking out in a mortgage in 2017 hitting an 11-year high.
Kensington Mortgages sales and marketing director Craig McKinlay says: “Property transactions have remained stagnant for some time now and this is a clear indication that limited housing supply continues to impact on the opportunities for buyers to move onto or up the property ladder, or even downsize in later life.”
But other mortgage experts said these figures showed the housing market remained on “solid footings” going into the year, despite wider economic uncertainty.
Private Finance director Shaun Church says: “The new year hasn’t rung in any big changes. Seasonal factors are at play here, with the market traditionally taking a while to warm up before activity ramps up in the spring. However, the plateau in transactions is also in line with more sedate pace of activity that became commonplace last year.”
He adds: “Given the current political and economic uncertainty, the fact that the market is holding steady should be appreciated, rather than taken for granted.”
He adds that while figures on first-time buyers remained positive, other areas of market, such as buy-to-let “are struggling to play catch-up”. Church says tax and regulatory changes were still having an impact on this part of the market.
He said the high cost of moving could also result in “sluggish activity” further up the housing chain, with many existing owners choosing to improve their property rather than move. Mortgage Advice Bureau says that these figures showed the housing market started 2018 on a “solid footing”.
It adds that if this pattern continues this should lead to a steady market over the next few months, although with significant regional variation in terms of house price growth and activity levels.
Mortgage Advice Bureau says a steady market is underpinned by the fact that mortgage rates remain at exceptionally low levels, with competition between lenders ensuring that rates are particularly competitive on both two- and five-year fixes.
However, OneSavings Bank sales and marketing director John Eastgates adds: “Transactions levels reflect the ongoing challenges of mortgage affordability. Whilst there have been any number of demand side initiatives, such as Help to Buy and the recent stamp duty changes for first time buyers, these are piecemeal approaches to housing policy at a time when it needs to be more holistic.”
He points out that the rise in first-time buyers had to bee seen against the “catastrophic” collapse of home ownership in the 25-34 age group.
Recent figures from the Institute of Fiscal Studies showed that home ownership among this age group has fallen from 65 per cent in 1995/96 to 27 per cent 20 years later.