Property sales ‘continue to inhabit a parallel world to all the economic indicators’

Posted on Friday, April 22, 2022

Residential property sales fell by more than a third in March compared with the same month a year earlier, according to the latest data provided by HM Revenue and Customs (HMRC).

An estimated 114,650 property transactions took place last month, which was 35.7% lower than March 2021 and a 2.6% rise compared with February 2022.

However, it is important that annual comparisons are treated with caution, given that 12 months ago homebuyers were rushing to beat the stamp duty holiday deadline – before it was extended.

Despite last month’s total being lower than March 2021, it is still significantly higher than the 92,060 house sales recorded in March 2020, and the 98,500 transactions that took place in March 2019.

Reflection on the latest data, Iain McKenzie, CEO of The Guild of Property Professionals, said: “Home sales continue to inhabit a parallel world to all the economic indicators, with March transactions up almost a fifth on February.

“Home moves are down year on year, but only because of a rush to buy in March last year caused by the impending end of the popular stamp duty holiday.

“The industry continues to see a lack of properties on the market, which is pushing up prices across the board.

“Demand remains high, and the market looks likely to keep moving upwards as it continues to ignore all the uncertainty in the rest of the economy.”

Jason Tebb, CEO of OnTheMarket, commented: “With transaction levels picking up in March compared with February, but considerably down compared with March 2021, the housing market continues to adjust to a ‘new normal’, an elevated version of the pre-pandemic market.

“Our own data indicates that high levels of buyer and seller sentiment continued unabated in March as the housing market continues to adjust and thrive, despite all apparent headwinds. The frenetic pace of this time last year has diminished somewhat but heightened buyer activity and demand continues to meet low levels of housing stock.”

Jonathan Hopper, CEO of Garrington Property Finders, remarked: “With demand still very strong, and estate agents reporting a flurry of enquiries over the Bank Holiday weekend, the market urgently needs more homes to come onto the market.

“If, as this data suggests, the market becomes more free-flowing and the mismatch between demand and supply continues to improve, we could see some of the heat come out of price rises in coming months.

“A year on from the ‘stamp duty stampede’ the market still has plenty of momentum, with thousands of buyers determined to change their home for one that better suits hybrid working and post-pandemic living.”

Tom Bill, head of UK residential research at Knight Frank, said: “Removing the distortive effect of stamp duty changes, property transactions in March this year were the highest they have been for the month in ten years.

“Sky-high demand continues to fuel the UK housing market as the country moves beyond the pandemic. However, we expect this to calm down later this year as mortgage rates creep up and the cost-of-living squeeze tightens. Furthermore, double-digit house price growth will slow to single digits as supply picks up and the housing market feels more tethered to the economy.”

Nick Leeming, Chairman at Jackson-Stops, added: “Whilst current pricing levels are still tempting homeowners on to the market, the ongoing imbalance between stock and demand could serve to keep prices rising but transaction numbers tempered through the course of year.

“As the Great British love affair with home ownership shows no sign of abating, now is the time for vendors to list their property and capitalise on market conditions that continue to favour sellers.”

Via @PropertyIndustryEye