Property transactions fall significantly compared to February 2022
28 March 2023
Residential property transactions decreased by 18% in February 2023 on the previous year - to approximately 90,000 on a seasonally adjusted basis - and are 4% lower than the previous month (which is historically a weak month for property transactions).
According to figures released today, the February transactions total is the lowest for at least the last 10 years - with the pre-pandemic level usually at 100,000.
Stacy Eden, head of real estate and construction at RSM, comments: ‘The statistics show that the estimated number of transactions are at a record February low highlighting the effect of funding challenges and high interest rates.
‘Our recent survey with over 200 property professionals reported that a significant majority of respondents stated funding was becoming more challenging and was likely to remain so. While the shortage of housing will keep the prices relatively stable for residential property transactions, the funding “pinch point” is being felt by house buyers. In particular, first-time buyers are most affected by a triple whammy as they have to cope with high interest rates, the cost-of-living crisis and high rents which reduces their ability to save for a deposit.
‘There is a similar story to tell with non-residential transactions. 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 at the bottom end of the last ten years of monthly February figures.
‘It is not surprising that with the economic uncertainty, cost of living crisis, higher interest rates and inflation that we are now seeing transactions falling. While opportunities remain for investors, the government needs to be mindful that businesses and individuals need supporting and the high and increasing levels of taxation that the UK real estate industry suffers compared to other OECD countries is not the way forward. We have seen the recent introduction of Residential Property Developer Tax, rises in corporation tax and the continuous high levels of Stamp Duty Land Tax adding to the problem of falling transactions.’
According to figures released today, the February transactions total is the lowest for at least the last 10 years - with the pre-pandemic level usually at 100,000.
Stacy Eden, head of real estate and construction at RSM, comments: ‘The statistics show that the estimated number of transactions are at a record February low highlighting the effect of funding challenges and high interest rates.
‘Our recent survey with over 200 property professionals reported that a significant majority of respondents stated funding was becoming more challenging and was likely to remain so. While the shortage of housing will keep the prices relatively stable for residential property transactions, the funding “pinch point” is being felt by house buyers. In particular, first-time buyers are most affected by a triple whammy as they have to cope with high interest rates, the cost-of-living crisis and high rents which reduces their ability to save for a deposit.
‘There is a similar story to tell with non-residential transactions. 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 at the bottom end of the last ten years of monthly February figures.
‘It is not surprising that with the economic uncertainty, cost of living crisis, higher interest rates and inflation that we are now seeing transactions falling. While opportunities remain for investors, the government needs to be mindful that businesses and individuals need supporting and the high and increasing levels of taxation that the UK real estate industry suffers compared to other OECD countries is not the way forward. We have seen the recent introduction of Residential Property Developer Tax, rises in corporation tax and the continuous high levels of Stamp Duty Land Tax adding to the problem of falling transactions.’
Stacy Eden
Partner, Head of Real Estate and Construction
Stacy Eden
Partner, Head of Real Estate and Construction