House sales down by a fifth in December compared with a year earlier

·4 min read

The number of house sales in December last year was down by a fifth compared with a year earlier, but bounced upwards from the previous month.

An estimated 100,110 transactions took place across the UK in December 2021, marking a 20.0% decrease compared with 125,190 house sales in the same month in 2020.

The December 2021 total was however 7.6% higher than in November 2021, according to the figures released by HM Revenue and Customs (HMRC).

The stamp duty holiday in England and Northern Ireland ended from October 2021.

Andrew Montlake, managing director of mortgage broker Coreco, said: “Transactions in December 2020 were given a phenomenal boost by the stamp duty holiday, so it’s no surprise that transactions last month were down in comparison.

“The fact that transactions were up on November is a better reflection of where the market is at.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “These numbers interestingly demonstrate market strength and resilience, even in the build-up to Christmas and withdrawal of Government economic support in September.

“Transactions are always a better measure of property market health than more volatile house prices.

“However, we have moved on since December. Activity and price rises are slowing a little, not least because of the continuing shortage of stock but concerns about rising inflation and mortgage rates is also compromising confidence when it comes to taking on debt.

“Looking forward, sales will pick up if home-owners can be persuaded to put their properties up for sale at perhaps more realistic levels, as there is no doubt that demand still strong.”

Nicky Stevenson, managing director at estate agent group Fine & Country said: “Sales continued to strengthen at the tail end of last year following a brief respite in the autumn with the unwinding of the Chancellor’s stamp duty holiday.

“The month-on-month growth in transactions comes despite the current supply of housing stock remaining at rock bottom levels.

“As new listings come on stream in 2022, there is every expectation that we may see sales volumes running at elevated levels going into the spring.”

Guy Gittins, chief executive of Chestertons, said: “We expect the market to remain buoyant for at least the first quarter of 2022 as London is seeing the return of office workers, international students as well as Londoners who left the capital during the peak of the pandemic but are now seeking a return to the hustle and bustle of the city.”

Joshua Elash, director of property lender MT Finance, said: “Inflation is beginning to bite and it will find its way to the property sector.”

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said: “Property sales continued to bounce back in December, but there’s every chance this is a temporary blip.

“Over the previous two months, sales have been recovering from the lows of October, climbing slightly above the kind of levels we usually see in December. However, the lag in these figures means they reflect sentiment before talk of rate rises started in earnest, so this bounce isn’t guaranteed to take off.

“October was always going to be a real low, because so many people hurried a sale through to take advantage of the tax break that finished at the end of September. The recovery in the two months to December sees a return to stronger levels of transactions.

“However, these figures measure completed transactions, so there’s a lag between people’s decision to buy and when they feed into these statistics – about two to three months later. We know that agreed sales have been dropping for months, so there’s a good chance this will manifest itself in lower completion numbers over the next few months.”

Nick Leeming, chairman of estate agent Jackson-Stops, said: “Of course, wider sentiment around higher costs of living when paired with rising interest rates could serve to cool the market, but we aren’t seeing this deter homeowners so far across our branches, with buyers snapping up property from off-plan projects to historic country estates.

“2021 saw many people choose an interim solution by renting, perfectly positioning themselves in the market to buy a permanent base in the areas they have tried and tested once property becomes available.”

Jonathan Stinton, head of mortgage relationships at Coventry Building Society, said: “2021 was, without doubt, a rollercoaster year with peaks in activity caused by the staggered end of the stamp duty holiday, the easing of lockdown measures and the ‘race for space’ as homeowners re-assessed their housing needs due to the impact of the pandemic. Lenders worked very hard to support borrowers during those incredibly busy periods.

“We’d expect 2022 to be a gentler ride for all involved, with a return to the more usual seasonal market activity.”

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