21 January 2022
If you are covering the latest UK monthly property transactions data, please see the following comment from Karen Noye, mortgage expert at Quilter:
“December saw another month of increased property sales, with a non-seasonally adjusted total of 113,470 sales and a rise of 11.8% compared to November 2021. However, it is worth noting that this is 14.6% lower than December 2020 sales.
“While we had previously seen a 52% decrease in sales in October, the last two months have seen further increases which suggest that a few months on from the withdrawal of the stamp duty holiday, the property market is continuing to defy expectations.
“Many had hoped that with the final withdrawal of the government scheme, demand for homes might finally subside and prices may subsequently fall. However, so far this has not been the case. ONS data released earlier this week showed that property prices had continued on the up, with the average UK house price reaching £271,000.
“However, soaring inflation could well halt continuously rising house prices. While the Bank of England opted to raise rates to 0.25% in December, it is unlikely they will be able to stop there if they wish to combat the steep rise in inflation we are witnessing, so further rate rises are expected.
“Highly inflated house prices coupled with elevated mortgage rates as a result of a further hike would make buying a home all the more unaffordable and could put off prospective home buyers.
“Currently, we are at an interesting juncture. Headlines are reporting that the worst of the pandemic is behind us and life should finally soon begin to make a return to normality, particularly now the government has reverted to its ‘Plan A’.
“While we may start to see a return to normality in day-to-day life, a return to normality for the property market still feels a long way off. Months on from the withdrawal of the stamp duty holiday, property prices are still only going one way and demand still outweighs supply.
“Those who had been holding out for a dip in prices following the scheme’s end will be disappointed, and even if the Bank of England do opt to further increase interest rates in the near future, we will have a long way to go before any semblance of normality returns to the property market.”
