March was a particularly buoyant period for sales, largely because of the rush for completions due to the end of the Help to Buy scheme and the fact there were more working days in the month. So, April’s numbers were expected to be somewhat lower.
However, the number of transactions in April was also 32% lower than in the same month of 2022 – highlighting how challenging the last year has been for the property market.
According to HMRC which published this data, the figures for April came following a spike in March and continued the downward trend the UK has been experiencing in house sales for a number of months.
Indeed the annual drop of 32% in the number of homes sold takes into account the period in September and October last year when mortgage rates soared as a consequence of economic instability following the mini-budget.
Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco, said: “It’s no surprise that transaction levels are down significantly compared to a year ago following the mini-Budget.
“In recent months, we have seen the market begin to awaken from its prolonged slumber, with buyers returning and getting used to the new mortgage rate environment.
“That, of course, was before the latest inflation figures caused SWAP rates and therefore mortgage rates to start to increase again.”
In the last week a number of lenders have pulled fixed-rate mortgages and some have hiked prices in response to continued high inflation figures.
There are concerns the challenges in the mortgage market will impact house sales going forward.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “There is no doubt that the reduction in competition for property will show itself in transactions, which are a better indicator of market health than more volatile prices. Sales are taking longer and there is not the same urgency we saw previously.
“Looking forward, we expect ups and downs bearing in mind worsening expected inflation data released last week.”
But Nicky Stevenson, managing director at national estate agent group Fine & Country, was more optimistic.
“We will see sales numbers increase soon, as property market activity has grown in recent months as mortgage rates have stabilised,” she said. “Mortgage approvals, an indicator of future transactions, have also been ticking up.
“This boost in activity is partly down to increased buyer confidence, alongside an increasing pipeline of new homes going up for sale, which is giving buyers much more choice and feeding their enthusiasm to begin their property search.”
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