UK’s property transactions fall by a third in a year

HMRC’s latest data reveals a staggering drop in UK property transactions, signalling a potential slowdown in the housing market.

In April 2023, the provisional non-seasonally adjusted estimate for residential transactions plummeted to 67,220 – that’s a 32% decrease compared to last year.

And it is a 29% decline from March 2023.

The seasonally adjusted figures paint a bleak picture, with April 2023’s estimated residential transactions falling to 82,120, marking a 25% drop from the previous year and an 8% dip from March 2023.

Significant month-on-month decline between March and April

HMRC attributes the significant month-on-month decline between March and April to the unusually robust performance in March.

A combination of factors, including more working days in March compared to April.

Also, it was the final month for completing purchases under the government’s Help to Buy scheme which contributed to the surge in transactions in March.

‘March was a blip’

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “March was a blip, driven by the fact it was the final month to take advantage of the Help to Buy equity loan scheme and once the window closed, sales dropped like a stone. And this may not be the end of the bad news.”

She added: “When you take the blip out of the figures, April’s decline is a continuation of the miserable trend we’ve seen since the beginning of 2023.

“We had a shocking January, a worse February, and after a brief hiatus in March, April saw us revert to the downward path again.”

‘These numbers are not particularly surprising’

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “These numbers are not particularly surprising as they not only relate to improvements in activity since the beginning of this year but also include the period immediately following last September’s mini-Budget when many pressed the pause button for several weeks.

“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.”

Mark Harris, the chief executive of mortgage broker SPF Private Clients, said: “Transaction numbers are coming under pressure in the face of higher interest rates and the cost-of-living uncertainty.

“Swap rates, which underpin the pricing of fixed-rate mortgages, have risen again on the back of the inflation news.”

‘April’s transaction figures are disappointing’

Alex Lyle, a director of Richmond estate agency Antony Roberts, said: “While April’s transaction figures are disappointing, the picture is not uniform with some properties selling better than others.

“The majority of the most desirable houses – £1.5m-plus family homes – are going under offer within three weeks of marketing.

“However, flats, in particular those compromised in some way, are struggling to achieve the prices we could have expected this time last year.”

Tomer Aboody, a director of property lender MT Finance, said: “With rates still rising, this is adding further uncertainty as buyers are unsure as to whether to wait or make a move.

“With transactions on a downwards trend, some stimulus is needed to encourage sellers to come to market, and downsizers in particular.”

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