Property sales: spring bump – but no bounce

Sarah Coles, head of personal finance at Hargreaves Lansdown, comments on the publication of the HMRC monthly property sales for March 2023, showing a spring bump – but no bounce.

Key points from the publication:
    • Property sales (non-seasonally adjusted) were 94,870 – up 26% from February – but still 14% lower than a year earlier.
    • When they’re seasonally adjusted, they look less positive – at 89,560 – up just 1% from February and down 19% from a year earlier.
    • On a seasonally adjusted basis, this is the slowest March in a decade.
Sarah Coles says:

“We saw a bump in the number of property sales in March, as thousands of buyers bought into the usual flurry at the start of spring.

“However, this wasn’t a spectacular bounce.

“There are some positives in the numbers, but nothing to bet the house on.

“There’s some hope to be gleaned from the fact that even in this market, spring is working some of its magic – and before the figures are seasonally adjusted, there’s a significant rise in sales. It means homeowners with well-priced properties stand a decent chance of selling.

“We also know that mortgage approvals for the coming months rose in February, so it could mean there’s some hope for April too.

“However, this is far from a bumper spring selling season.

“The seasonally-adjusted figures remove the impact of seasonal trends. Without them we had a shocking January, a worse February, and a very marginal improvement in March – which was still the worst March in a decade.

“During the month, the RICS Residential Market Survey charted yet another month of falling buyer numbers and fewer sales, and because of the lag in the market, this is likely to mean depressed completions through the spring and into the summer.

“We know that mortgage rates will play a key role, but while gradual reductions have helped support sales, rate reductions have paused, and according to Moneyfacts, average rates actually saw a small increase after the surprise inflation figures in March.

“This seems to be dying away, but we’re unlikely to have seen the last of the rate rises from the Bank of England.

“So, while we’re not expecting this to alter the general downward trend of mortgage rates, it could make it slower and lumpier in the coming months – with a knock-on impact on property sales.”

 

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay