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Hmrc Uk Residential Transactions For June 2008

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HMRC have revamped their transaction series a bit - it’s now based on a completion month timeline and is split by country and residential/non-residential along with the usual SA/NSA B) . The new series excludes those properties sold for less than £40k and annoyingly only goes back to Apr/2005, so you can’t establish the longer historical correlations, however it does have a much better correlation with the BoE approvals data and should help with understanding the split between cash/mortgaged transactions.

HMRC UK residential transactions for Jun/08 - 91k NSA, 77k SA, -45% YoY

BoE Approvals (lagged 1.5m) and HMRC UK Residential Transactions NSA

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BoE Approvals (lagged 1.5m) and HMRC UK Residential Transactions SA

zogydt.png

Red: old count

Green: new UK residential excluding the less than £40k

Blue: BoE approvals for house purchase

Link: http://www.hmrc.gov.uk/stats/survey_of_prop/menu.htm

[note: determining the approval/completion lag is a bit tricky as they have independent seasonality, i.e. lag will be seasonal as well, the 1.5m shift is very rough]

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The seasonal adjustment seems to be increasing slightly downwards.

I'm suprised how low the transactions were look in 2005-06

It must be the bottleneck in processing that throws it off.

Edited by maxwell

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The seasonal adjustment seems to be increasing slightly downwards.

It will tend to do that in Spring, yes...

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It will tend to do that in Spring, yes...

I meant it was 16% over previous years, now 17%, Edit: might be smoothing across the processing bottleneck which is the huge spike.

Edited by maxwell

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It looks like the approvals collapsed first in late-07 leaving the market temporarily (and only partially) propped up by the cash sales, then it just failed to restart in Jan/08 once the price drops began to feed through into the Haliwide indices.

Edited to add: the 'old' system set the timeline by the month that the stamp duty certicifate was issued, so this added lots of process smoothing (and a few odd bottlenecks) and reduced the seasonal variation; the 'new' system counts the certificate for the month that the sale completed in, so the seasonality is somewhat resored. But, obviously, people choose to complete at a convenient time for them, and this adds a new seasonality on top of that already in the pipleline.

Edited by spline

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I meant it was 16% over previous years, now 17%, Edit: might be smoothing across the processing bottleneck which is the huge spike.

Ah. Seasonally adjusting a smaller number by a formula more complex than percentage leads to adjusting it by a higher percentage of that new smaller number, maybe? I dunno.

Edited by jdc

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It looks like the approvals collapsed first in late-07 leaving the market temporarily (and only partially) propped up by the cash sales,

Could you explain the cash sales, is the gap between BOE and HMRC showing these and how.

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Yes, in broad terms the HMRC UK residential numbers should include both mortgage and cash sales, whereas the BoE series counts the net mortgage approvals, so the difference should give an indication of the number of cash sales. But, as this series was only published today we really need to do a bit more work and get it calibrated against the LR transaction series (based on sale registrations) and also try to get some idea of the undercounting (if left uncorrected, or otherwise) of certificates for the most recent months.

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