New data has revealed UK residential property transactions began to recover in February 2023 with commentators suggesting there are ‘plenty of reasons to be positive’ heading into Q2.
HM Revenue and Customs (HMRC) said the provisional non-seasonally adjusted estimate of the number of UK residential transactions in February 2023 is 76,920.
While this is 18% lower than February 2022, it’s also 2% higher than the previous month following a drop of 7% at the start of the year.
Residential transactions do, however, remain marginally lower than pre-pandemic levels. For example, the provisional non-seasonally adjusted estimate in February 2023 is 76,920 compared to 82,830 in February 2020.
“Despite a slowdown in transactions completed in February, there are still plenty of reasons to be positive about the market as we head into Q2,” said Danny Belton, Head of Lender Relationships, Legal & General Mortgage Club.
“According to Moneyfacts, product choice recently passed 4,000 for the first time since August 2022, while the average product shelf life has rocketed to 28 days (up from just 15 a month ago), all of which makes life easier for brokers and borrowers.
Additionally, the average two- and five-year fixed rates fell month-on-month for the third month running, supporting both purchase and remortgage activity.
These are all positive and recent developments which have not had an opportunity to impact transactions yet.”
He added that any dip in activity will likely return the market to pre-pandemic levels rather than the “supersonic” levels seen amidst the stamp duty land tax holiday.
“Today’s data shows how we are continuing to see the impact of a challenging economic environment on residential transaction volumes. Whether through buyers pulling out of deals, or current lending markets dulling consumer appetite, it’s clear the transaction highs of the past two years are long behind us,” said Andy Sommerville, Director at Search Acumen.
However, similarly to Belton, Sommersville was more optimistic about what lies ahead:
“Macro-economic conditions are more promising however, as if the Chancellor is correct, we have not only narrowly missed a recession, but have significant growth ahead.”
