Property sales fall 12% in the year to April
This seasonally adjusted figure (which takes account of the stamp duty holiday) is also 3.9% lower than March this year, when residential property transactions hit 114,650, according to HRMC.
In April 2019, seasonally adjusted residential property transactions were pegged at 97,830 overall.
Non-seasonally adjusted residential property transactions in the UK came to 97,970 in April, which is down by around 13.9% compared to the same period last year and down 10.5% from March.
HMRC said that year-on-year comparisons should be “treated with caution” as 2021 saw “significant volatility”, including forestalling.
In April 2019, there were around 87,860 residential property transactions, non-seasonally adjusted, which shows the property market is still elevated from pre-pandemic levels.
Housing market remains robust but market cooling expected
Brokers said that while the market had not experienced similar frenzied activity levels seen in 2020, residential property transactions remain strong.
Emma Hollingworth, distribution director at MPowered Mortgages, said: “While we haven’t yet seen the high level of activity seen throughout the market in 2021, it is pleasing to see that transactions figures remain robust.”
She added there was still “strong demand” in the market, despite further rises in interest rates and cost of living increases.
“This is further proof of the resilience of our housing market and its ability to perform strongly through difficult economic times,” she added.
However, Hollingworth also noted that with a further six rate hikes predicted by year-end by some economists, which would bring the base rate to 2.25%, “time was of the essence” for borrowers to secure a mortgage before pricing increased.
She noted that the window of availability on mortgage deals was now “shorter than it has ever been before” at 21 days.
Intense competition and short supply
Emma Cox, director of real estate at Shawbrook, said the transaction figures showed there was “still intense competition for the short supply of housing in the UK”.
“Despite the growing pressure on household finances, many homebuyers are clearly still determined to move ahead with their purchases. Buyers are also conscious of the Bank of England’s (BoE) future interest rate decisions – a significant driver in pushing people to conclude their purchases as soon as possible,” she said.
Cox added that strong house price growth would probably not continue given the wider economic environment and signals were pointing to a “measured cooling of the market in the months ahead”.
She continued that lenders were supporting market demand with “competitive rates and favourable loan to values”, and mortgage rates were still relatively low in a historical context.
Cox said that supply was a crucial issue, especially as rental properties may have to meet new energy efficiency standards.
“Just as the financial sector is responding to that challenge with new lending products that address the issue, further clarity from the government is needed to understand how they intend to support landlords and homeowners in transitioning to more energy efficient homes,” she noted.
Kevin Webb, managing director at Legal & General Surveying Services, said that it was likely that the market would not see a repeat of high activity seen in 2021.
“Nevertheless, it is encouraging that transaction figures are still strong. Despite an increase in the BoE base rate and an ongoing rise in the cost of living, overall demand is healthy and the future market outlook is hopeful. It’s yet another sign that the UK’s housing market is robust and can weather difficult economic times without buckling under pressure,” he said.
He continued that as rates continued to climb and offer conditions become more complex house surveys would be even more important for buyers so they can make informed decisions.
“Now more than ever, prospective homeowners need the additional expertise and reassurance that a survey can bring in one of the biggest and most expensive decisions they will make. Surveyors have a chance to share their extensive knowledge, adding value to the customer experience during a challenging time,” he said.