HMRC: Property transactions at lowest level since records began

Sales of residential homes fell to the lowest level since records began in 2005 last month, new figures from HM Revenue & Customs show.

In April there were 38,060 transactions completed, which is less than half the number seen at the same point a year ago.

Having been given the green light to get moving again by the Government, the property sector is scrambling to shift its operations to ensure buyers, sellers and staff can adhere to social distancing measures while keeping deals moving.

According to HMRC’s new figures, which it claimed should be treated with ‘some caution’, residential property transactions during April this year were 53.4 per cent lower than in April 2019 and 46.1 per cent lower than March this year.

Lockdown measures stalled the housing sector and caused estate agents to close their doors, moves to be postponed and completion dates thrown into chaos. 

The Government estimated that around 450,000 buyers and renting tenants had their property plans affected by the pandemic. 

HMRC’s figures show completed sales with a value of £40,000 and above, but cautioned that its latest releases are subject to some uncertainty, and therefore its figures are provisional.

Its report said: ‘Impacts from Covid-19 are evident within the latest HMRC UK transactions data.’

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: ‘Of course, it is always transactions rather than more volatile prices which are a better measure of housing market strength at this particular time.

‘This data comes at a particularly interesting time, just after the Covid-19 bombshell hit, so one of the first to reliably assess the damage. 

‘This has been significant with probably worse to come, while new normal values are established. 

‘On a more positive note, activity has picked up considerably since we returned to work, at least in part, although it will take several months for interest to build to offers and completions and be reflected in these or similar reports.’ 

Meanwhile, Joshua Elash, director of property lender MT Finance, says: ‘The April figures show just how dramatically the lockdown has impacted the property market with residential transactions hugely suppressed.

‘At a time when the Government is spending at an unprecedented rate, the corresponding drop in revenues is going to add further to the economic fall out from our response to Covid-19.

‘We expect May’s data to be similar to this, if not worse. We need to get the market fully open and working again as quickly as possible if we are to limit the damage to the economy as a whole and the property sector specifically.’

HMRC’s latest transaction figures are based on its own records, together with those from relevant authorities in Scotland and Wales.

Numbers published by the Office for National Statistics this week suggest that house prices across the country increased by 2.1 per cent, or £5,000, in the year to March, with average asking prices now around the £232,000 mark.

In London, house price inflation rose by 4.7 per cent in the year to March, marking the biggest annual jump since December 2016. 

London house prices remain the most expensive at an average of £486,000. The North East continued to have the lowest average house price, at £127,000, and is the only English region yet to surpass its pre-economic downturn peak of July 2007.

Some insiders in the sector think pent-up demand has been brewing amid buyers during lockdown.

Property website Rightmove said that on Tuesday this week it recorded its busiest day since Thursday 5 March, with nearly 5.3million visits.

Areas in Manchester, Liverpool and Leeds have shown particularly big upswings in buyer searches compared with a year ago, Rightmove added.

Miles Shipside, Rightmove’s housing market expert, said: ‘One week on from the surprise opening of the housing market and agents are still showing caution and quite rightly putting safety first, but many had already started to prepare during lockdown and so have been able to start reopening their branches and conducting viewings.’