HMRC reports 29% drop in residential property transactions

The number of residential property transactions in the UK fell to 67,220 in April, a 29% drop compared to March’s total, new figures from HMRC have revealed.

April’s non-seasonally adjusted estimate also represents a 32% decline from the same month last year.

HMRC’s monthly estimates are based on its own records as well as those of Revenue Scotland and the Welsh Revenue Authority, for Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) in each of the three nations respectively.

Transactions were particularly strong in March due to a larger number of working days relative to April, HMRC stated, as well as it being the final month for purchases to complete under the Government’s Help to Buy Equity Loan Scheme.

In the non-residential property space, HMRC also reported that April had 8,870 transactions, a figure 32% down from march, as well as 17% down from April last year.

Managing director of capital markets and finance at LiveMore, Simon Webb, commented: “Property transactions continue to fall following a month-on-month rise in March primarily due to more working days compared to February and April.

“The slowdown is likely to continue as uncertainty in the economy along with the high cost of living and rising mortgage rates will put some people off moving home. Until inflation comes down to more palatable levels and Bank base rate reduces, we expect 2023 to deliver a subdued housing market.”

Propositions director at PRIMIS, Vikki Jefferies, added: “Stubborn inflation and the cost-of-living crisis continue to have a significant impact on the housing market, with the most recent data reflecting a cooling in property price growth. However, it is reassuring that transaction figures are still well above pre-pandemic levels, highlighting a resilient and active market.

“Continued, albeit slower, growth in house prices also represents healthy demand – one of the reasons we expect property transactions to remain stable in the months to come.

“Having said this, recent news that the Bank of England is looking to further raise interest rates this summer has caused some lenders to withdraw some products from the market in the last few days. Swap rates have also increased in response to this news, meaning some mortgage rates will increase in the short term as well.”

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