House sales: the peaks and troughs start to flatten
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on the HMRC monthly property transactions publication, showing the peaks and troughs of house sales start to flatten.
Key points from publication:
- Property sales (non-seasonally adjusted) were 97,970 in April – down 10.5% from March, and down 13.9% from a year earlier.
- This is still the second busiest April for a decade, and is around 10% higher than April 2019.
HMRC recommends treating seasonally-adjusted figures with caution because of the impact of the stamp duty holiday, so Hargreaves Lansdown has used non-seasonally-adjusted figures.
Sarah Coles says:
“The vertiginous peaks and troughs in house sales have started to level out, and while they’re still at a higher altitude than before the pandemic, it raises the question as to whether we’re heading for lower ground as the market starts to slow.
“Property sales were slightly lower than in March, but we shouldn’t read too much into this, because we still saw the second busiest April in a decade.
“Meanwhile, we know from the latest RICS residential survey that April saw the eighth consecutive month of increasing demand from buyers, so slowing sales owe much to the fact that there was very little stock to go around.
“What’s more noticeable is that the peaks and troughs have levelled off, and we’re seeing a far steadier number of transactions.
“While the seasonally-adjusted figures need to be taken with a pinch of salt because of the distorting impact of the stamp duty holiday, they show that since October 2021 we’ve seen sales slowly rise and then fall back.
“The big question is what happens next. There are plenty of pressures building in the market. Rocketing prices mean buyers are under increasing pressure, and rising house prices and mortgage rates will be stretching affordability ever thinner.
“At some point we will see sales slow, as buyer enthusiasm cools slightly. However, at this stage we may well see gentle undulations for a while to come, before we head for lower ground.”
Kindly shared by Hargreaves Lansdown
Main article photo courtesy of Pixabay
