Caution is advised when interpreting estimates for the latest month due to their provisional status. This is because they are based upon incomplete data as not all SDLT, LBTT and LTT returns are received by HMRC, Revenue Scotland and WRA when figures are compiled.
We therefore expect statistics to be revised in future months, although transactions figures generally settle after approximately 3 months.
Long Story Short.
‘
With Banks nursing bond losses there will be a credit crunch that crunch will only get worse with a rate hike, already we have the fallout by the judicious use of Tactical rate hike battlefield nukes, a .25 % hike would be an escalation to ICBM proportions.
The ECB already panicked and went for .5%, Main Street yet again will be falling victim to Wall Street and the Looting reprise of the 2010-2015 dash for cash seems to be in reprise under the stewardship of Baileys Brigands.
National Statistics
UK monthly property transactions commentary
Updated 21 March 2023
Headline statistics
Headline statistics from the latest transactions data include:
- the provisional non-seasonally adjusted estimate of the number of UK residential transactions in February 2023 is 76,920, 18% lower than February 2022 and 2% higher than January 2023
- the provisional seasonally adjusted estimate of the number of UK residential transactions in February 2023 is 90,340, 18% lower than February 2022 and 4% lower than January 2023
- the provisional non-seasonally adjusted estimate of the number of UK non-residential transactions in February 2023 is 8,710, 7% lower than February 2022 and 8% higher than January 2023
- the provisional seasonally adjusted estimate of the number of UK non-residential transactions in February 2023 is 9,870, 7% lower than February 2022 and 5% higher than January 2023
Executive Summary
Towards the end of last year mortgage and interest rates increased and we are starting to see the impacts of those changes within these statistics. Seasonally adjusted residential property transactions appear depressed, indicating a slowing of the housing market.
The latest statistics
The latest statistics section provides information on UK residential and non-residential transactions during the previous 3 years. To demonstrate any underlying trends within the data, seasonally adjusted transactions estimates are provided alongside non-seasonally adjusted estimates.
Caution is advised when interpreting estimates for the latest month due to their provisional status. This is because they are based upon incomplete data as not all SDLT, LBTT and LTT returns are received by HMRC, Revenue Scotland and WRA when figures are compiled.
We therefore expect statistics to be revised in future months, although transactions figures generally settle after approximately 3 months.
Figure 1: Non-seasonally adjusted and seasonally adjusted UK residential property transactions by month between February 2020 and February 2023.
Figure 1 demonstrates the following trends for UK residential transactions:
- UK residential transactions have generally been stable in recent months, but we are now starting to see a decline in the numbers of transactions.
- Residential transactions are marginally lower than pre-coronavirus, for example the provisional non-seasonally adjusted estimate in February 2023 is 76,920 compared to 82,830 in February 2020.
- During the spring of 2020 there were substantial decreases in property transactions due to the coronavirus pandemic. UK residential transactions gradually increased in subsequent months, alongside large peaks in March, June, and September 2021 caused by temporarily increased nil rate bands of SDLT, LBTT, and LTT
Figure 2: Non-seasonally adjusted and seasonally adjusted UK non-residential property transactions by month between February 2020 and February 2023.
Figure 2 demonstrates the following trends for UK non-residential transactions:
- Non-residential transaction figures appear to be rising, with non-seasonally adjusted transactions for February at 8,710, compared to January’s 8040. The seasonally adjusted figures support this, indicating a rise in UK non-residential transactions between January and February 2023.
- During April and May 2020 there were significant decreases in property transactions due to the coronavirus. Following this, non-residential transactions increased for several months, before stabilising.
UK residential transactions
Residential property refers to buildings used or suitable for use as a dwelling, or in the process of being constructed for use as a dwelling. It also includes the gardens and grounds of dwellings. Go to HMRC Stamp Duty Land Tax Manual for more definitions of residential and non-residential properties.
The following section provides detailed analysis of UK residential transactions. To demonstrate any underlying trends within the data, seasonally adjusted transactions estimates are provided alongside non-seasonally adjusted estimates.
Figure 3: Comparisons of non-seasonally adjusted and seasonally adjusted UK residential transactions in February between 2014 and 2023.
Figure 4: Financial year to date (April to February) comparison of UK residential transactions between the 2013 to 2014 and 2022 to 2023 financial years.
Figure 5: Historic non-seasonally adjusted and seasonally adjusted UK residential property transactions by month between 2005 and 2023.
Figure 5 demonstrates the following trends for UK residential transactions:
- there were large peaks in transactions during March, June, and September 2021 caused by increased numbers of taxpayers taking advantage of temporarily increased nil rate bands of SDLT, LBTT, and LTT
- the coronavirus pandemic caused substantial decreases for transactions during 2020 quarter 2
- there was a large peak in March 2016 caused by increased amounts of taxpayers completing before the introduction of higher rates for additional residential properties from April 2016
- there was an unseasonal peak in December 2009 caused by the ending of a temporarily increased nil rate band for residential transactions
- the fall in transactions from late 2007 coincided with the financial crisis, before which transactions had increased steadily before peaking in mid 2006
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UK Housing Debt. Market Update q4 2022. “higher-for-longer = Housing Weak.” All eyes on Thursday March 23 2023. Over the Brink to Baileys Bust! https://t.co/NYMZpHMQQe via @ThemesDNA
— Real-Estate Land Development Limited (@RealEstateLand3) March 21, 2023
Statistics on mortgage lending: Q4 2022 edition
Latest findings
- The outstanding value of all residential mortgage loans was £1,675.8 billion at the end of 2022 Q4, 3.9% higher than a year earlier.
- The value of gross mortgage advances in 2022 Q4 was £81.6 billion, which was £4.3 billion lower than the previous quarter, but 16.3% higher than in 2021 Q4.
- The value of new mortgage commitments (lending agreed to be advanced in the coming months) in 2022 Q4 was 33.5% less than the previous quarter and 24.5% less than a year earlier, at £58.4 billion. If the onset of the Covid-19 pandemic and period immediately thereafter is excluded, this was the lowest observed since 2015 Q1.
The Latest Mortgage figures bear out the continuing depressed market activity and of course, we now need to factor in the problems with SVB and Credit Suisse.
The Budget was not helpful and we will see what the BOE does next week regarding further rate rises.
new commitments of 58.4 billion q4 2022
new commitments of 58.4 billion q4 2022
2023 YTD from BSA 56.897 billions
https://www.bsa.org.uk/statistics/mortgages-housing#:~:text=01%20Mar%202023-,Mortgage%20approvals,-Loans%20approved%20but
https://tradingeconomics.com/united-kingdom/mortgage-approvals
The past quarter has been like watching a car crash in slow motion, SVB went through the windscreen last Friday, of course, that was over there, But maybe that’s a sort of Techy Northern Rock event.
https://tradingeconomics.com/united-kingdom/mortgage-approvals
The Everything Bubble and the Everything Bust. Prospects for UK Housing and UK Housing Markets.
Savills
UK Housing Market Update – March 2023
HOUSE PRICE FALLS CONTINUE AND ACTIVITY INDICATORS REMAIN SUBDUED
House prices fell for the sixth consecutive month in February, down by -0.5%, according to Nationwide. Prices are now down -3.7% from their pre-mini budget peak last August, and down -1.1% on an annual basis.
Completed sales volumes remained relatively strong in January, down just –3.2% compared to the pre-Covid average for the month reflecting a pipeline of 2022 agreed sales. New mortgage approvals in January were at their lowest level since 2011, -40.8% down on their pre-Covid average for the month, according to the Bank of England, a low yet to be reflected in completed sales figures.
The imbalance between supply and demand, a key driver of value growth, is correcting. The ratio of new sales to new instructions across the market as a whole has returned to pre-Covid levels, according to TwentyCi. The February RICS survey also supports this, showing demand still dropping more rapidly than supply.
The weakening activity is a direct consequence of higher mortgage rates. Another rise to the base rate could be on the cards, potentially above what has already been priced in by lenders and this could stall the current downward trend in mortgage rates.
These high interest rates are particularly deterring mortgaged home movers, with their numbers in December down by -6% compared to their 2017-19 average for the month. As they are often more discretionary buyers, there is little incentive for them to move while mortgage rates are high and the economic backdrop is uncertain.
First time buyers have remained undaunted so far, with their numbers 8% higher in December than the pre-Covid average. Despite the challenges of securing a mortgage with the current high rates, high levels of rental growth and fierce competition for rental stock provide them with a strong incentive to access the housing ladder if they can.
Cash buyers numbers are similarly robust, up 10% in November on their pre-Covid average. Their immunity to the high rates has provided some additional strength to the market, particularly at the upper end.
Nov 11, 2022
Mark to Market, The Liars Lexicon #GFC2 #LiarsLexicon #MarktoMarket #SHitHitsFan
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