The provisional non-seasonally adjusted estimate of the number of UK residential transactions in April 2024 is 79,590, 17% higher than April 2023 and 9% lower than March 2024, according to recent data released by HM Revenue & Customs (HMRC).
On a seasonally adjusted basis, the number of UK residential transactions in April 2024 is 90,430, 10% higher than April 2023 and 5% higher than March 2024.
Commenting on the data, Anthony Codling, RBC Capital Markets Managing Director said:
“Housing transactions rose for the fourth month in a row in April and were up year-on-year for the first time since November 2022. Homebuyers and homemovers appear to be leaning into the housing market headwinds and have their sights firmly set on sunnier times and the expectation of lower mortgage rates ahead. Overall housing transactions in April were 10% below their five-year average, suggesting that when the headwinds die down and mortgage rates start to fall housing market activity is likely to increase further.”
Nathan Emerson CEO Propertymark said that year on year it’s “extremely encouraging” to see an increased confidence within the housing market. He continued:
“However, with a general election now only a matter of weeks away, there is the potential to see a summer slowdown, as people hold back to better understand what policies and support they may be promised by various political parties. First-time buyers will be a key group eagerly awaiting clarification on what support may be offered to them moving forward, especially as we have now seen a welcome dip regarding the rate of inflation, which we hope will also soon progress into a drop in interest rates too.”
Andrew Lloyd, Managing Director at Search Acumen, said that early signs that both transaction numbers and property prices are stabilising “will give residential and commercial pundits fuel for a busy summer ahead, undeterred by the forthcoming election”. He added:
“Many would safely predict an uptick in current residential transaction numbers across May and June as consumer confidence stabilises. Likewise, we could see a more immediate boost to commercial real estate deals if interest rates decline come the next Bank of England decision on June 20th. An overall sentiment of hope is tangible across the industry right now.
More broadly, macroeconomic volatility and currency risk exposure will be leading drivers in investor activity across commercial real estate markets for the rest of the year. Favourable exchange rates may incentivise global investors to make a move; just as lower interest rate environments and significantly decreased inflation can unlock deals. Currently, we’re in a ten-year low in commercial real estate lending, in which low overall transaction volumes in real estate equity markets, together with valuation uncertainties, points to a risk averse market. Technology and automation represent a small, but ever-increasing advantage when transactions need to move fast against this economic backdrop, and something we’re seeing brokers and lawyers increasingly use to their advantage for clients right across the board.”
Nick Hale, Chief Executive Officer at Movera, commented:
“Today’s Government non-seasonally adjusted figures for UK property transactions for April show a dip from last month but, more encouragingly, a healthy increase on last April. Hopefully, the monthly figure is no more than a blip. But will transactions steady next month and continue an upward trend? With inflation falling, what is on everyone’s lips is whether an interest rate cut is in the offing – this would certainly boost transactions further down the line. But the recent surprise General Election announcement has thrown everything up in the air. Whatever happens, our focus as always will continue to be on supporting those looking to move or remortgage to make the homebuying experience as easy as possible.”
What’s more, the Nationwide House Price Index released has also revealed that house prices grew by 0.4% month on month in May. House prices were also up 1.3% year on year, with the annual rate of growth accelerating from 0.6% the previous month. Anthony Codling, RBC Capital Markets Managing Director, said:
“House prices nudged up in May confirming that UK house prices are remaining firm in the face of economic uncertainty. It is too early to say if the election will impact house prices, but the Nationwide agrees with our view that general elections do not appear to impact house prices. Life goes on outside the ballet box, and it seems that life in our own homes is more important than life inside 10 Downing Street.”
Michelle Stevens, mortgage expert at personal finance comparison site finder.com said that a lot of “uncertainty still surrounds the UK housing market”. She continued:
“…but the figures show that buyer demand is strengthening. The Bank of England is widely predicted to cut rates in the coming months, and as a result buyers who have so far held off are beginning to return to the market. However, despite inflation falling to the lowest rate since September 2021 last month, it’s important to remember that many households are still struggling to make ends meet, and therefore affordability issues remain. Because of this, it’s unlikely that we’ll see UK house prices sprint away in 2024, but there are encouraging signs of recovery.”
