"Such is the lead-in time to any house sale completion, that what we’re actually looking at is the level of activity probably between September and October 2019"
For instance, there has (quite rightly) been a significant amount of media interest in the latest housing sales transaction figures released by the HMRC recently because they are definitive and detail the actual numbers, not, for instance, a somewhat skewed version of the truth as we might get with various house price indices.
So, it’s true that many in the market have been encouraged by the latest figures for January this year which have revealed a 4.1% month-on-month increase, and a 5.1% increase on the figures from January 2019.
With transactions numbering well over 100,000 – 102,810 to be exact – it’s not surprising that they are being jumped upon as a strong indicator of the upturn in the UK housing market, and housing activity in general. Indeed, that house sale figure is the highest we’ve seen in this country since July 2017, plus it’s fair to say that January is not often seen as a traditionally strong month for activity, with the Spring and Summer months laying claim to that particular ‘title’.
However, and the HMRC has been quick to point this out, January figures don’t truly reflect January ‘activity’ at all; such is the lead-in time to any house sale completion, that what we’re actually looking at is the level of activity probably between September and October 2019, which perhaps gives us slightly more reason to be cautious about what will happen throughout the rest of 2020.
And yet, there are some other notable positive trends that we can perhaps extrapolate from these HMRC statistics because clearly September/October last year was not just pre-General Election, but pre-General Election campaign, and certainly prior to the result of that Election being known and prior to the UK ‘officially' leaving the EU.
All of which, we are led to believe, have delivered a greater degree of certainty and confidence for those who are looking to become active in the housing market again. So, while we can, of course, appreciate a two and a half-year record in terms of house sales transactions, it will perhaps be the figures that are released in the months to come which will truly show whether the much-talked-about ‘Boris Bounce’ is a real trend.
In that sense, there are a number of other questions to ask? Did house buyers/sellers gain greater confidence as the Election campaign went on? Was there an immediate jump in activity in the immediate weeks after the Election result was known? How has 2020 kicked off? Do the actual numbers chime with the anecdotal evidence which suggests that activity levels have performed very strong? And what about the level of activity in February – was there a slight stalling as potential purchasers, for example, waited to see whether it would be advantageous for them to buy after the March Budget, rather than before?
Even with all those questions still requiring answers, it’s still however possible to see a positive movement – indeed, our own activity levels towards the end of 2019 and into 2020 appear to chime with the other industry ‘noise’ I am hearing. A growing number of surveys and valuations have taken place, especially since the start of the year, and in that all-important purchase space I think it’s safe to say we’ve all seen an upturn.
So, while we live in the present with our own work, the analysis and statistics we tend to get, are obviously based on past results, and the nature of the housing market means that there can often be a long lead-in time from initial activity to completion. Until we have that ‘holy grail’ of offers to completions taking weeks, maybe even days rather than months, we’re always likely to be playing catch-up with the industry data we get.
That said, there does appear to be much more to be positive about now than say six months ago, and just as customers and borrowers wanted more certainty before they made their move, now stakeholders will be seeking the same level of certainty around property valuation, surveys, and the like, in order to give us a much better chance of improving those completion numbers.
2020 has undoubtedly started well, and there appears to be the opportunity to secure more business in the months ahead – that is certainly something to welcome but only time will tell whether this is short-term bounce or a more sustainable upturn.
