Monthly transaction figures for June published by HM Land Registry (HMLR) on Thursday revealed a drop in transactions month-on-month as the cost of living begins to tighten its vice on homebuyers.
The provisional non-seasonally adjusted estimate of UK residential transactions in June 2022 is 96,290, 3.1% lower than May 2022.
This is also 55.1% lower than June 2021, though the fall from the prior year can be put down to the SDLT holiday that was ongoing at the time.
The figure of 96,290 is, however, 4% lower than pre-pandemic levels in June 2019, where transactions reached 100,340.
Andy Sommerville, Director at Search Acumen, said:
“Transactions are naturally down from the incredible heights we saw in 2021, and we have seen a month on month decline with volumes tracking below pre pandemic figures.
Volumes are coming down, not least because there isn’t the stock available to sustain them. Similarly, we are continuing to see delays in the transaction process due to inefficiencies and conveyancing backlogs, which are then compounded further by mortgage offers running out, or by buyers re-evaluating their finances when facing a dynamic which juxtaposes high house prices with rising household bills and creeping inflation. This uncertainty leads to sales stalling or being delayed, again impacting monthly transaction volumes.
There continues to be exceptional demand despite cost of living pressures and in a turbulent economy lawyers caseloads might be smaller than they were this time last year, but they are increasingly complex. At the same time, buyers and sellers are all pushing for quick sales before interest rates rise again, or before we see expected further inflation and energy bill rises in the autumn which could impact demand. All of those factors mean the conveyancing sector continues to operate under immense strain.
When we look at the range of pressures the market has faced in the last two years, rapid digitisation is essential. Driving efficiency through technology adoption will create a transaction process that is more robust, better able to cope with a range of pressure points, and better suited to servicing modern buyers and seller who are increasingly tired of a transaction process that can often be slow and stressful for all involved.”
In response to the release of HMRC’s latest UK property transaction data, Nathan Emerson, CEO of Propertymark comments:
“Our recent data shows that agents are witnessing a cooling to the market with an increase of 12% of practitioners reporting that the majority of sales were sold below asking price compared to March 2022.
This is now allowing stock levels to recover after the rapid paced couple of years seen previously. If we are indeed returning to a more traditional market, [we] would expect to see an uplift in activity in Autumn.”
Vikki Jefferies, Proposition Director at PRIMIS Mortgage Network, commented:
“With rates rising rapidly and high inflation biting, it is more important than ever that people have access to the right advice and the most suitable products for them. Prospective buyers are being strained by these financial pressures and this means that fewer of them are buying properties. As a result, the market is slowing down after the initial increase in activity at the start of the year.
With the cost of living continuing to soar, the market is becoming increasingly complex. AR brokers are in a strong position to meet the needs of prospective buyers at this time. They must ensure that they are signposting the best products for their clients amid the ongoing economic turmoil.”
