Housing transactions fall in April
The department said there were 99,910 residential transactions in April. The figure is 20.3% higher than April in 2016, however there was an unusually low level of transactions for that month following changes to Stamp Duty Land Tax.
Additional property tax rates were announced in the Autumn Statement 2015 for England, Wales and Northern Ireland, and in the Scottish Government’s draft 2016-17 budget for Scotland, distorting the figures.
HMRC said non-tax factors may also have played a role, such as the Bank of England’s plans to curb buy-to-let mortgages, which led to a rush to buy before April 2016, and the EU Referendum.
The number of non-seasonally adjusted residential transactions was about 22.5% lower than March and 12.8% higher than April 2016. The figures for the three most recent months are subject to revision.
Jeremy Leaf, north London estate agent, said: “At first glance one might think these figures are hugely disappointing but when you consider what was happening this time last year and what has happened to property transactions in the past few months, they represent steady progress for the housing market.
“Transaction numbers are really key to what is going on in the market – how many people are actually getting on with the business of moving – and these numbers suggest some resilience.”
He added that the figures are a useful reflection of the impact of stamp duty land tax change. “What the HMRC figures do show is the huge impact that changes to stamp duty can have, not just on property transactions but the wider economy, bearing in mind how many people are dependent in other trades on people moving home.”
Shaun Church, director at Private Finance, agreed: “The upcoming election is unlikely to be having a significant effect on property transactions, particularly as the residential market took last year’s Brexit vote in its stride. The main reason behind weaker transaction figures remains the changes to stamp duty, which have particularly limited activity towards the upper end of the housing market.”
Brian Murphy, head of lending for Mortgage Advice Bureau, added that a drop off at this time of year is not unexpected.
“One could suggest that the decrease in transactions between March 2017 and April 2017 is normal, and in line with usual seasonal expectations.”
“Overall, transaction levels to date in 2017 are up by 5.5% on the same period in 2015. Reviewing previous data, we can also see that there was also a decrease in transactions between March and April in 2015. Buy-to-let anomaly of 2016 aside, there was a drop off in transactions between March and April last year too.”
Murphy added that, given the paucity of stock in many areas of the country, coupled with the ongoing economic climate and political developments, the housing market in the UK is actually remaining steady.