Property sales: March was a blip, April sales dropped like a stone

Sarah Coles, head of personal finance at Hargreaves Lansdown, comments on the publication of the HMRC monthly property sales for April, showing March was a blip, while April sales dropped like a stone.

Key points from publication:

• • Property sales (non-seasonally adjusted) were 67,220 in April – down 29% from March – and 32% less than a year earlier.
  • When they’re seasonally adjusted, they look marginally better – at 82,120 – down 8% from March, and 25% lower than a year earlier.
  • However, they’re at their lowest level since October 2021.
  • Aside from the onset of the pandemic, this is the worst April in a decade.

Sarah Coles says:

“March was a blip, driven by the fact it was the final month to take advantage of the Help to Buy equity loan scheme.

“Once the window closed, sales dropped like a stone. And this may not be the end of the bad news.

“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.

“The figures for early summer may not be too hideous, given that mortgage approvals had risen in February and March.

“Zoopla also says sales agreed in May were 11% above the five-year average.

“Admittedly, demand remains far lower than average, and RICS has been charting a steady drop in new demand for months.

“However, there’s reason to hope we’ll see the decline level off.

“However, sales later in the summer will reflect what’s happening in the market right now, which may not be pretty.

“The rise in core inflation in figures released in May saw the market price in rate rises to around 5.5%.

“There’s a reasonable chance this is an over-reaction, and more evidence of a global slowdown could take some of the heat out of the swaps market and bring these expectations down.

“However, it meant 7% of mortgages were withdrawn, and a raft of repricing – pushing rates up.

“In the coming weeks, this could back off a little if emerging news about inflation and the economy helps dampen rate expectations.

“However, it could take a while for mortgage rates to fall back, and it’s likely to disrupt the market in the interim.

“If we do get more depressing news about the economy, that could also persuade people to put purchases on hold, which means the property market could be on for a difficult summer all round.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay