UK residential property transactions rose by 1% in March 2023 compared to February, signalling the end of turmoil in the residential mortgage market
UK non-residential transactions in March 2023 increased by 6% compared to February 2023. While transaction volumes have risen and will continue to do so over the coming months, they will likely steady out.
What counts as a residential property transaction?
Any transaction concerning residential property in the UK was counted in the statistics. Residential property is defined as a building that is designed or appropriate for use as a dwelling or is under construction for that purpose. It also encompasses the surrounding gardens and grounds of the building.
Non-residential properties include several land and property types, including but not such as commercial properties, agricultural land, forests, and any other land or property that is not designated for residential use.
Transaction levels are still not what they were
A pale imitation of the usual spring bounce is predicted. This will likely dampen the higher volumes of expected transactions in the spring.
“We may still see abnormalities further down the tracks with the end of Help to Buy, a new tax year, and a potential further interest rate rise likely to dampen the mood,” commented Andy Sommerville, director at Search Acumen, the property data and insight provider who provided the statistics.
“Although commercial property activity shows a positive incline, overall, the market continues to reflect a prolonged sentiment of caution, falling short of the transaction peaks seen before the financial crisis in 2008. All firms will be willing on the strongest growth sectors, from life sciences to office space, in the hope of breaching the magic 12,000 monthly transactions by the summer,” continued Sommerville.
Stamp duty and the pandemic have affected transaction rates
Residential property transactions so far in the current financial year (2022 to 2023) are considerably lower than they were at the same point in the previous year (2021 to 2022). The pandemic and temporary stamp duty reductions heavily influenced transaction patterns during this period.
In 2021, there were significant spikes in property transactions during the months of March, June, and September. These spikes were caused by an increased number of taxpayers taking advantage of temporarily increased nil rate bands of SDLT, LBTT, and LTT.
Conversely, the pandemic caused substantial transaction decreases during the second quarter of 2020. These patterns can be seen in the graph below.
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