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CONSIDERING that 2017 wasn’t exactly the easiest backdrop for the UK property market, news out this morning that overall, the number of residential properties sold last year was just half a percent lower than 2016 will be welcomed by many.

Latest data released this morning from HMRC reveals the number of residential property transactions both for December and the whole of 2017, and is seen as significant by industry analysts as it provides one of the few truly independent bellwethers of the market.

The report shows that in December there were 99,100 residential property transactions, a drop of 3.3% on November, the overall tally of properties sold in 2017 standing at 1,223,400.

For context, in 2016 there were 1,230,580 homes sold, meaning that the year on year difference is just 0.58%.  Not bad at all, considering some of the headwinds faced over the previous twelve months.

But what’s driving such a healthy result, despite reports of London and the South East seeing significant price reductions and lower levels of activity?

It would appear that the dominance in recent months of regions such as the Midlands, North West and South West together with East Anglia, have mitigated the ‘London drag’ effect which has been observed of late, as the demand for properties in London has dropped to the lowest levels seen for many years.

Jeremy Leaf, north London estate agent and a former RICS residential chairman explains, “Although the transaction numbers are broadly similar between 2016 and 2017, what HMRC the figures today hide are the regional variations between London and the South East compared with other areas of the country.”

Jeremy continues, “Prices in the Capital and surrounding areas have softened of late in response to affordability and demand, whereas outside of the London property is seen as better value.

“Places which are just as attractive to live, albeit in other ways, are now appealing to buyers who would previously only have considered London and its close environs.

“We’re now seeing buyers who are deciding that they won’t put up with the lifestyle compromises required to purchase and live in London and who would rather take advantage of what’s available elsewhere, and with improving transport links this is now become more prevalent over the last twelve months than we’ve previously seen.”

Brian Murphy, Head of Lending for Mortgage Advice Bureau also comments, “It’s reasonable to suggest that, now the ‘scores are on the doors’ for last year, we can see that the UK property market has held steady against the prevailing factors we’ve seen in 2017.

“Whilst one would expect the level of transactions for December to be slightly lower than the preceding months, a 3.3% drop is well within seasonal expectations and hardly suggests that the housing market dropped off a cliff last month.”

Brian adds, “Taking all of this into account, for the numbers for 2017 to be so close to the previous year does indeed suggest that we’re going into 2018 with the market in solid shape, which may be assisted yet further by the introduction of the SDLT scheme for first time buyers along with newly released competitive deals from mortgage lenders which have seen some rates released in the last couple of weeks lower than they were before the interest rate rise in November.”

Although anecdotal reports point to a slower start than usual to 2018, overall it would appear that in many areas, the housing market remains robust.

Lenders such as the Nationwide and Halifax released their annual forecasts recently which suggested that average house price growth is likely to reach around 2.5% over the next 12 months and transaction numbers for this year are potentially going to plateau at a similar level to 2017.

However, given that the current overall economic view is somewhat hawkish, from the property industry’s perspective at least, ‘more of the same’ in terms of a steady level of growth and transactions would be a result many would perceive as positive.

Source: Express

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