However, data released this morning now confirms that the number of properties sold since the start of 2020 has indeed increased. The latest residential transactions statistics from HMRC evidences a month on month uplift in completed sales of 4.1 percent, and an annual increase of 5.2 percent.
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In real terms, looking at the seasonally adjusted figures, there were 102,810 residential sales completed last month, when compared with 97,690 completed sales in January 2019.
This means that the total number of sales completed last month is the highest since July 2017.
Many industry analysts regard transaction volumes as a more accurate barometer of the property market than movements in average values, which can be more volatile, particularly on a month to month basis.
What’s also interesting is that January completions generally are a consequence of deals agreed in September and October, suggesting that there were a number of buyers who felt sufficiently confident prior to the General Election in December to take the plunge and commit to moving home.
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As Jeremy Leaf, former RICS residential chairman, explains: “HMRC’s report is the latest in a series of recent surveys telling a familiar story.
The release of pent-up demand began even before the election, which we’ve noticed in our offices too.
The increase in transaction numbers is particularly striking; if they are like this now, numbers are set to be even stronger as we approach the peak spring-buying season.”
Jeremy cautions, “However, the strength of any recovery will probably depend on whether enough properties become available at realistic prices for buyers taking advantage of improved affordability.
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UK property news: Increase in number of homes sold in January as confidence recovers
“The market remains price sensitive so buyers will not pay tomorrow’s prices today.”
Gareth Lewis, director of property lender MT Finance also suggests: “January tends to be one of the quieter months for the housing market as people get back from their winter breaks and take a while to get going, so this jump in transactions bodes well for the spring market.”
“The uptick in transactions is strong evidence that the Boris Bounce is in full effect.
“You can fall into a trap of over-egging the positivity that is around but now we are seeing it on paper. “Sentiment has improved to the point where transactions are getting across the line.”
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Although many regions around the UK, such as the Midlands, Yorkshire and Wales have seen steady, if not increased, numbers of transactions over the past year, both London and the South East have suffered from a distinct lack of activity, causing prices to stall and fall since mid-2016.
However, since the General Election result in December, it appears that buyer and seller confidence has quickly returned to the capital.
Guy Gittins, Managing Director of estate agency Chestertons observed: “The London housing market has been depressed for some time, but buyers are now more confident about the future since the General Election and we have seen a huge increase in demand for properties in the ‘bread and butter’ £500,000 to £1.75m range.
“These are homeowners, rather than investors, who feel more secure about employment prospects and are keen to move before prices start to rise again.”
Guy adds: “We are already seeing offers on properties that are much closer to the asking price, and expect that demand will only increase as we approach the traditionally busy spring market.”
Of course, there is a note of caution in all of this.
With confidence and demand increasing, the number of properties available isn’t currently keeping pace with the amount of homes available for sale in many areas. An imbalance in stock naturally leads to upwards pressure on prices, until more homes are available for sale.
For those who are purchasing over the next few weeks, particularly in areas where there currently aren’t many homes on the market, it’s important to ensure that you’re not over-paying for a property. The chances are that later this year when the market has re-balanced, buyers will benefit from better negotiating power.
For the moment though, it would appear that sellers in many areas are very likely to not only achieve their asking price, but also pick and choose who they will sell to, particularly if there are multiple, competitive bids for their home.
Follow Louisa on Twitter: @louisafletcher
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