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Property Transactions Drop >35% in a Month, says HMRC. Industry Reacts

The number of homes sold in the UK dropped over a third between March and April, according to the latest release of property transaction data from HMRC.

Despite being the most transactions in any April since 2007 with 117,860 homes sold, this was a drop of 35.7 per cent from the previous month. Yet, the figure was still nearly 180 per cent more than at the same point a year previously.

The new follows last week’s announcement from the Office for National Statistics that the average price of a UK home had risen 10.2 per cent between March 2020 and March 2021.

Industry comment on the figures was mixed, with some praising the strength of the market while others cautioned of a drop in activity once the Stamp Duty holiday ends.

John Eastgate, managing director of Property Finance at  Shawbrook Bank, said that fears of a boom-and-bust cycle were misplaced.

He added: “The long-term prognosis for housing remains positive.  Opportunities are still out there for buyers and investors that have capital available and are keen to move. City centres that seem to have fallen out of favour in recent months still show promise as we head back to the office and return to a level of normality.”

Others were similar bullish. Sam Mitchell, CEO of Strike, said: “However, with not long to go until the June deadline, the countdown is officially back on and pressure is mounting. Combined with the uplift in 95% mortgage deals on offer, alongside the continued easing of lockdown restrictions, demand within the UK property market will likely be amplified in the months ahead.”

They added: “Some might be cautious of the stamp duty deadline fast approaching, but there are no signs of this derailing the market. In fact, with a tapering off period until October, low stock levels, rock-bottom interest rates and the introduction of the Government’s high loan-to-value lending scheme, there are more than enough factors to keep things buoyant.”

A more-cautious tone was sounded by Andy Sommerville, director at Search Acumen. He said that there was a ‘fragility’ to the UK property market. He added: “Concerns over whether activity levels will sustain once the stamp duty holiday is wound down are mounting.”

Others too a more middle-of-the-road approach. Jonathan Sealey, CEO at Hope Capital said: “It’s important to put today’s figures into context as the non-adjusted level of transactions is almost 200 per cent up on April 2020. This was very much ground zero for the sector having just been plunged into lockdown and all the uncertainty that brought with it. So, even bearing in mind the slide we’ve seen today, we are still a long way from those dark days 12 months ago. And going forward there are real signs of optimism more widely with extremely positive retail sales figures out today, and forecasts for growth revised upwards to suggest a much stronger recovery to come this year.”