Property sales start to freeze up in December

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on the publication of HMRC monthly property sales for December, showing property sales start to freeze up in December.

Key points from publication:

• • Property sales (non-seasonally adjusted) were down 1% during 2022, and down 3% between November and December, to 108,960.
  • Sales have been steady and remain above pre-pandemic levels (December was still 6.5% higher than December 2019), but December saw a fall.

Sarah Coles says:

“Property sales started to freeze up in December, and we can expect a permafrost to descend for the rest of the winter.

“December is usually pretty deadly when it comes to sales, because it’s such a miserable time to move, but this December’s drop in sales is likely to herald the start of something more significant.

“Sales had been steady for a few months, and they remain above the level immediately before the pandemic.

“However, the drop we saw in December will not be the last. The RICS Residential Market Survey has charted six months of falling sales – since June – and has noted that ever since the autumn, the descent has picked up the pace.

“We know sales being agreed in the months following the mini-budget in late September were likely to be far lower, given the chaos it unleashed in the mortgage market and the enormous damage it did to buyer confidence.

“However, with the average sale taking around three and a half months to complete at the moment, we can expect this to start manifesting in January’s figures.

“From then onwards, we can expect a deep chill to settle into the market. The Building Societies’ Association saw confidence in buying a property hit an all-time low in September, and by December it had barely started to recover.

“Only 14% of people felt that it was a good time to buy, so we can expect buyers to sit on their hands, and transactions to ice over.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay