Transactions will pick up over next three years, says Hamptons

Hamptons is forecasting that transactions will pick up over the next three years – although not to pre-crisis levels.

The firm predicts that sales volumes will rise by 50% overall by 2016, taking them above the million-a-year milestone, compared with the 1.2m annual turnover before the credit crunch.

Hamptons predicts transactions of 734,000 this year – likely to be in line with Land Registry records, rather than the much higher HMRC statistics.

Fionnuala Earley, research director at Hamptons International, said: “The fixation with house prices as an indicator of housing market recovery is misplaced. Transaction levels are a far superior indicator of housing market health.

“A liquid and active market is the key to avoiding volatility and to ensuring a stable and sustainable housing market in the UK.”

Like Countrywide, which has also forecast improved sales volumes, Hamptons believes that Help to Buy will be an important factor.

The research suggests that while activity is running at only just over half of 2008 levels, transactions are already on the increase.

It says that the new homes sector will support transaction levels but that only about 10% of house sales are from that part of the market.

Earley said: “Concentrating on house prices alone gives a misguided picture of housing market health. A liquid and active market is the key to ensuring a stable and sustainable housing market in the UK.

“But it will take a long time before they return to levels we became accustomed to five years ago. Households are still stretched, and as prices increase, affordability will bite too.”

Hamptons forecasts house prices in England and Wales to increase by 6% next year and by 24% in the next five years. House price growth will be strongest in central London next year at 8% and by 32% over five years.