February’s flurry won’t last forever: ONS property sales figures

Property sales (non-seasonally adjusted) were 96,250 in February – up 15.3% from the dip in January, and down 20.6% from a year earlier.

The year earlier figures were hugely distorted by people rushing for the initial stamp duty deadline, and this is still the second busiest February in a decade.

Sales over the 2021/22 tax year so far are still higher than any other year for the past decade (1,261,900).

HMRC published monthly property sales for February: UK monthly property transactions commentary – GOV.UK (www.gov.uk)

HMRC recommends treating seasonally adjusted figures with caution because of the impact of the stamp duty holiday, so we have used non-seasonally adjusted figures.

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown: “February saw a flurry of house sales – producing the second busiest February in a decade. It follows news of runaway house prices during the month, with price hikes back to the pace we saw just before the financial crisis. But while on initial glance, it looks like a boom time for property, there are strong signs that it isn’t set to last.

“Reality can’t be kept at bay forever. Higher energy bills are already hitting mats around the country, we’ve seen horrible hikes in prices at the pumps and in the supermarket, and tax rises are just around the corner. The war between Russia and Ukraine is also having an impact, both on sentiment and on pushing inflation even higher. We knew there would come a time when buyers decided they simply couldn’t afford to stretch themselves, and we’ve had the first indications that we may have hit that point.

“The latest Building Societies Association Property Tracker found that in March,  just 18% of people thought that it was a good time to buy a home – the lowest this has been since the tracker was launched in June 2008. Almost two thirds of people in that survey (65%) said they were worried about rising prices. And concerns about rising interest rates also featured – with 48% of people citing the affordability of monthly mortgage payments as a barrier to buying – up from 39% in December.

“The length of time it takes to sell means weakness can take four months to filter into the figures, which means we may not see sales figures fall back for a few more months, and prices are likely to keep rising at an impressive rate for now.

“February’s bump in sales reflects market sentiment in November and December, when buyers were outstripping sellers and prices being agreed were rising at pace. Even at that point, there was an awful lot of speculation that interest rates were set to increase, but some buyers will have wanted to get in ahead of the hike, to get their hands on a five-year fixed-rate mortgage at a bargain basement price, and others won’t have been phased by the idea of a small bump in rates from rock bottom.”