Monthly transaction figures published by HM Revenue & Customs (HMRC) on Tuesday revealed that the number of UK residential property transactions in April was 13.9% lower than April 2021 and 10.5% lower than March 2022.
The provisional non-seasonally adjusted estimate of sales in April 2022 is 97,970, plummeting from 110,990 in March.
HMRC noted that the large peaks seen in March, June and September 2021 were “caused by forestalling relating to temporarily increased nil rate bands of SDLT, LBTT, and LTT”, adding that comparisons “should be treated with caution”.
Indeed, April’s transactions figures also remain above the average of the seven years prior to the pandemic – 83,900 – though some will no doubt be alarmed by the significant drop since March.
Speaking to figures within the market, Today’s Conveyancer understands that instructions and the stream of work relating to other matters remains steady, though fall throughs are “up by 10-15%”.
Reacting to the figures published on Tuesday, Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said:
“The peaks and troughs in house sales have started to level out, and while they’re still at a higher altitude than before the pandemic, it raises the question as to whether we’re heading for lower ground as the market starts to slow.
Property sales were slightly lower than in March, but we shouldn’t read too much into this, because we still saw the second busiest April in a decade. Meanwhile, we know from the latest RICS residential survey that April saw the eighth consecutive month of increasing demand from buyers, so slowing sales owe much to the fact that there was very little stock to go around.
The big question is what happens next. There are plenty of pressures building in the market. Rocketing prices mean buyers are under increasing pressure, and rising house prices and mortgage rates will be stretching affordability ever-thinner. At some point we will see sales slow, as buyer enthusiasm cools slightly. However, at this stage we may well see gentle undulations for a while to come, before we head for lower ground.”
Cecilia Mourain, MD, Moneybox Homebuying, said:
“April 2022 saw a 73% YOY increase in the number of Lifetime ISA house purchase withdrawals being made by Moneybox customers. In fact, earlier this month Moneybox Homebuying had its busiest ever week for mortgage applications.
Despite rising house prices and costs of living challenging first-time buyers, as well as the latest HMRC data revealing an overall decline in property transactions, the desire to own a home remains high as every day we see how committed first-time buyers are to achieving their goals.”
Richard Pike, Phoebus Software sales and marketing director, commented:
“The non-seasonally adjusted figures today show that the market is now broadly back in line with the number of transactions pre-pandemic. After the heightened activity created by the stamp duty holiday, this is pretty encouraging given the economic outlook. However, most of these completed transactions have been in the pipeline for months and we are yet to see the effect that inflation, and the increasing cost of living, will have on people’s appetite to move. That, together with another potential interest rate rise in a matter of weeks, and we could be looking at a very different picture in another three months.”
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