The number of property transactions has increased for the second month in a row, new data released by HMRC shows.
According to the figures, the provisional seasonally adjusted estimate indicates that the number of UK residential transactions in February 2024 reached 82,940.
This represents a six percent decrease compared to February 2023, but a one percent increase compared to January 2024.
Non-seasonally adjusted residential sales increased by nine percent in February compared to January.
Commenting on the latest statistics, Terry Woodley, MD of development finance at Shawbrook, said: “A further rise, albeit small, in property transactions will be welcome news for developers.
“Another month-on-month increase reflects heightened confidence in the market, and declining inflation coupled with the general expectation of interest rate cuts later on in the year will provide further optimism for developers looking to take on more projects.”
Mr Woodley added: “Many will also be keeping an eye on the outcome of the Government’s brownfield consultation which could help to streamline planning processes.
“This will also help the rental market which continues to be starved of stock in the face of soaring demand.
“Many developers have had to alter their strategies to deal with market uncertainty and rising costs, but the prospect of reduced planning barriers and lower mortgage rates may encourage developers to shift more in favour of residential developments.”
Nick Leeming, Chairman of Jackson-Stops, said that, while today’s figures show signs of stability, recent falls in inflation and the expectation that the Bank of England will cut the Base Rate in May are paving the way for a spring bounce.
Mr Leeming said: “Home movers are 17 percent more active than this time last year according to our own national network of offices, indicating a potential uplift to come in the months ahead.
“The return of sub-four percent mortgage rates and a notable uplift in supply is giving buyers greater choice, and affordability is also expected to further improve as the year progresses.”
Mr Leeming noted: “It’s important to remember that these figures represent the final stage of the market and the increased buyer interest that we are seeing now serves a longer-term trend of market buoyancy. Spring is in bloom, and this is a remarkably positive sign for the market ahead in a general election year that needs to show strength and resilience.
“At the outset of people’s searches in recent weeks, across the Jackson-Stops network, we are seeing a positive trend of greater enquiries and new listings which, if converted, will lead to a strong pipeline of sales in the spring and summer.
“Whilst it is too soon to declare 2024 a better year for the market than 2023, already the signs are there.”
Following a dip in mortgage rates at the start of the year, Karen Noye, mortgage expert at Quilter said these have more recently risen slightly, which is likely to cool the market further.
Ms Noye said: “This quiet period has put some downward pressure on prices, but it has not had the dramatic impact that some had predicted when mortgage rates soared.
“This has resulted in moving home or taking the first step onto the property ladder becoming that much harder when combined with higher mortgage rates.”
However, she noted: “All eyes are on the Bank of England as we await its first interest rate cut. It will now have some confidence that inflation is finally coming to heel, but has a difficult balancing act ahead of it and will be reluctant to move too much too quickly so we are likely to be waiting for some time yet.
“This will have a knock-on effect on the housing market as many prospective buyers will likely be holding out in the hopes of lower mortgage rates.
“Once the Bank does begin lowering its base rate, however, it would present a more favourable borrowing landscape which could pull prospective buyers out of ‘wait and see’ mode and accelerate the housing market’s recovery.”
