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Property transactions fall to lowest level since October 2021

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Written by: Shekina Tuahene
31/05/2023
UK residential property transactions dropped by a quarter year-on-year to 82,120 in April, figures released today have revealed.

The seasonally adjusted number showed this was also 8% lower than the previous month, according to HMRC. 

On a non-seasonally adjusted basis, transactions fell by 32% annually to 67,220 and dropped by 29% compared with March. 

HMRC said the downward trend had resumed in April following a spike in transactions in March. It attributed the higher activity in March to the larger number of working days during the month and the last round of purchases completed through the Help to Buy scheme. 

Transaction levels between January and March this year were also lower than before the pandemic, with 270,000 transactions completed compared to 283,540 in 2020. 

Fresh market uncertainty will suppress activity 

Andrew Montlake, managing director of mortage broker Coreco, said it was no surprise that transactions were lower than a year ago. 

He added: “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.”

“With many hoping the second quarter would be the start of a new normal market, this now looks like it will be pushed back to the third quarter. If the Bank of England panics and puts rates up much further, this could have a profound effect on the housing market.” 

Mike Scott, chief analyst at estate agents Yopa, suggested that the transactions levels coupled with “disappointing inflation figures” could mean that “the housing market slowdown is likely to be longer and deeper than we originally anticipated”. 

Karen Noye mortgage expert at wealth managers Quilter, added: “While the economic path is starting to look a little more predictable and we had seen an uptick in transactions in March, April’s figures show a return to the buoyant market we had grown accustomed to is not yet on the cards. 

“House prices have been slowly declining in recent months, reflecting the decreased level of demand, and we can expect them to continue falling steadily for a few months yet as sellers compete for buyers.”

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