HMRC figures for April are the latest in a series of industry reports which point to a slowdown in the housing market. Find out more and give your view.
What’s the latest?
Property sales dived by more than a fifth in April as the housing market showed further signs of a slowdown.
The number of homes changing hands during the month stood at 83,010, down from the 107,090 recorded in March, according to figures from HM Revenue and Customs. That’s a slide of 22%.
The figures are also the lowest since January, generally one of the most subdued months for the housing market – and suggest that, this year, the traditional ‘spring bounce’ has failed to materialise.
Did you know? HMRC only records property transactions of over £40,000…
Why is this happening?
Some of the fall in transactions can be explained by the timings of Easter in April. It meant there were fewer working days in on which property sales could be completed.
But what about the month-on-month drop, particularly over the traditional spring pick-up?
This could be partly attributed to people delaying moving plans until after next month’s General Election and until we know more about the impact of Brexit.
Stretched affordability and the close to record-low number of properties on the market are also likely to have played a part in the slump in sales levels.
Most people still believe house prices will be higher this time next year...
This time next year, UK house prices will be...— Zoopla (@Zoopla) May 17, 2017
Who does it affect?
The news from HMRC means fewer houses on the market for sale. This could deter existing homeowners from selling too, exacerbating the existing shortage of housing stock.
And those who need to go ahead with a purchase might face stiff competition from other buyers.
However, this could be offset by falling house prices – as explained below – which is attracting more first-time buyers back to the market.
Sounds interesting. What’s the background?
The figures are the latest in a series of data that point to a slowdown in the property market.
Nationwide Building Society reported that house prices fell for two consecutive months in March and April, while the Office for National Statistics (ONS) also recorded a £1,200 drop in average values in March.
The Royal Institution of Chartered Surveyors’ survey pointed to a subdued market in April too. It found the number of homes being put up for sale dropped for the 14th month in a row, while enquiries from new buyers stayed flat and sales levels fell.
However, the dip in activity and easing of property values, is not prompting forecasts of a house price correction among commentators.
Instead, the shortage of homes on the market combined with record-low interest rates and the ongoing mismatch between supply and demand, are expected to support property values.
A recent Zoopla survey also found that nine out of 10 Brits expect property values to rise in their area over the next six months.
Top 3 takeaways
- Property sales fell by 22% in April on the previous month, says HMRC
- Report follows several others which indicate a slowing property market
- But commentators are not forecasting a house price correction.