Simran Mehta and Valentina Macchiati
UK property transactions could be recognized and noticed straight inside minutes of cost settlement utilizing CHAPS, the UK’s high-value cost system. Making the most of the migration to the ISO 20022 cost customary in June 2023, and the introduction of obligatory goal codes from Could 2025, now we have developed a real-time indicator of housing exercise. We discover that this intently aligns with current official housing market statistics and due to this fact can act as a dependable real-time indicator of those statistics, superseding beforehand developed value-based proxies.
How effectively does CHAPS observe official statistics?
CHAPS individuals are required to offer goal codes for property transactions. Essentially the most regularly used of those is ‘PCOM’, which corresponds to the property completion cost.
Within the UK, property market exercise is usually measured by way of HMRC and Workplace for Nationwide Statistics (ONS) statistics. These datasets seize totally different dimensions of the housing market; HMRC supplies a measure of property transaction exercise, whereas ONS statistics focus particularly on residential property transactions. HMRC statistics are primarily based on Stamp Responsibility Land Tax (SDLT) returns (which is paid after completion) and exclude transactions beneath £40,000. They’re printed with a one-month lag, with the newest month and the earlier two months reported on a provisional foundation. In distinction, ONS statistics are primarily based on accomplished and registered residential property transactions which ends up in a three-month lag in publication.
To evaluate how effectively funds with the PCOM goal code seize accomplished property transactions, we examine PCOM volumes with HMRC’s property transaction collection. Our evaluation finds that complete PCOM quantity is a superb real-time indicator of property transactions and supplies an correct measure of accomplished residential transactions within the UK.
Chart 1 reveals shut alignment between CHAPS PCOM volumes and HMRC property transaction information. From Could 2025 to August 2026, there have been 1.6 million makes use of of the PCOM goal code, which is equal to over 99% of the residential property transactions reported in HMRC statistics over the identical interval. The imply absolute proportion distinction between month-to-month PCOM volumes and month-to-month HMRC residential property transactions is 2.8%, whereas the Pearson correlation is 0.96, demonstrating there’s a sturdy alignment between them. Since PCOM can be utilized for a broader vary of property-related transactions than these coated by residential property statistics alone, extending the comparability to HMRC complete property transactions (residential and non-residential) yields corresponding values of 9.9% and 0.96. This comparability means that our PCOM collection is a helpful indicator of combination property market exercise.
Chart 1: Comparability of month-to-month volumes of CHAPS PCOM transactions to HMRC month-to-month information on property transactions
Notes: Compares month-to-month volumes of CHAPS PCOM funds (inexperienced), alongside HMRC month-to-month property transaction volumes accomplished within the UK with worth of £40,000 or above, together with complete property transactions (orange) and residential property transactions (blue). HMRC information is out there till August 2026, together with provisional information from June 2026; CHAPS PCOM information till September 2026. The x-axis represents months, and the y-axis reveals transaction volumes in 1000’s.
For each collection (taking a look at HMRC complete, or HMRC residential solely), our evaluation means that PCOM volumes observe property completions intently, no matter protection. Moreover, whereas HMRC information is printed with a lag (delayed by one month, 4 if we exclude provisional information), PCOM supplies a close to real-time sign, which means that CHAPS funds information may seize turning factors in property market exercise as they emerge.
We anticipate there to be some variations between the 2 collection as a result of they each think about barely totally different units of transactions. CHAPS might embrace property-related transactions beneath £40,000, or these not captured by SDLT returns, whereas HMRC might seize property purchases settled by way of different cost rails, funded from non-UK financial institution accounts, or accounted for utilizing different property-related goal codes.
What do cost timings reveal about housing exercise?
Whereas we don’t but have ample information to develop a seasonally adjusted collection, the granularity of funds information within the interval Could 2025 to September 2026 permits us to take a look at different seasonal options of the info. We will verify the patterns align with expectations:
- Property transaction exercise falls sharply over the Christmas and New Yr interval, with common every day PCOM volumes 57% decrease than throughout the remainder of the 12 months. This displays a seasonal sample, wherein transactions are sometimes introduced ahead and accomplished earlier than the vacation interval.
- Most individuals need to transfer earlier than the weekend; Fridays account for 36% of transactions.
- Transactions are concentrated within the morning; 56% of transactions are settled earlier than noon; providing you with the afternoon to unpack!
Housing cost values: protection and limitations
A key benefit of goal codes is that they permit us to establish property completion funds straight, fairly than counting on value-based proxies. Subsequently, the PCOM collection supplies a extra full image of property market exercise throughout the total distribution of property transactions, whereas providing a extra exact measure by isolating solely property-related transactions.
Within the 12 months to July 2026, over two-thirds of PCOM property completion funds by quantity sit throughout the £100,000 to £500,000 vary, in step with the typical UK home worth. Nevertheless, this vary solely corresponds to 50% of the overall worth of property funds settled, with the highest 1% of funds by worth accounting for greater than 17% of the overall PCOM worth settled in CHAPS. This highlights the significance of capturing higher-value transactions, which had been prone to be excluded underneath the earlier value-based proxy.
Throughout the identical interval, the ONS experiences that the typical home worth within the UK was £273,000, whereas the typical worth of a CHAPS PCOM property cost was £344,000. Right here, it’s key to know that the 2 measures are usually not straight comparable. The ONS chart is derived from their UK Home Worth Index, which relies on residential property transactions and makes use of a mix-adjusted methodology to account for variations within the traits of properties offered over time. In distinction, PCOM funds seize a broader set of property transactions and mirror the property completion cost worth, making the typical extra delicate to high-value transactions.
Extra broadly, whereas CHAPS information can present well timed insights into housing market exercise, it doesn’t comprise the detailed property-level data required to assemble conventional home worth indices, corresponding to these produced by the ONS, Nationwide and Lloyds. These indices modify for variations in property traits by way of hedonic regression strategies, guaranteeing the index displays underlying worth actions fairly than adjustments within the composition of properties offered. As this data isn’t out there inside CHAPS funds information, CHAPS is healthier suited to analysing transaction patterns and market exercise, limiting its means to straight measure home worth inflation or replicate established home worth indices.
Conclusion and additional work
The introduction of obligatory goal codes has remodeled CHAPS funds information into a robust instrument for real-time monitoring of the property market. By straight figuring out housing transactions, the ensuing PCOM collection supplies a extra correct and timelier indicator of property completions than earlier value-based proxies. This information may also assist the Financial institution monitor intraday CHAPS property transaction flows and establish and handle operational dangers. The evaluation introduced on this article relies on utilizing cost settlement dates, values and goal codes; it doesn’t use any private data.
With transaction-level timestamps, PCOM information allows housing market patterns, shifts and developments to be monitored as they emerge. For instance, we noticed a peak in PCOM volumes on the finish of March 2025, in step with adjustments to SDLT thresholds, demonstrating the potential of CHAPS information to seize shifts in market exercise in close to actual time.
Wanting forward, we may discover relationships with mortgage associated exercise by enriching CHAPS information with complementary information sources, corresponding to Product gross sales information. This may enable us to reinforce real-time monitoring and help us to discover additional housing insights.
A footnote on earlier work
Earlier evaluation on CHAPS housing used a value-based CHAPS proxy to trace housing exercise, which confirmed broad alignment with HMRC traits when evaluating 12 months on 12 months variations between 2007–16. Nevertheless, this strategy relied on assumptions within the absence of extra granular information and has been much less efficient lately, with the connection weakening from 2023 onwards. The introduction of goal codes and enhanced CHAPS granularity now permits for a extra direct and exact view of underlying housing exercise, lowering reliance on proxy-based approaches which embrace non-housing transactions and exclude excessive worth transactions.
The authors are grateful to James Sanders and Sam Cuthbertson for helpful discussions and feedback.
Simran Mehta and Valentina Macchiati work within the Financial institution’s Wholesale Fee Division.
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