Bleak News from the UK Property Market
Sean Randall highlights the weakness of the UK property market and does not believe the position will improve in the coming months
HMRC’s provisional estimates for UK residential property transactions for the month of April 2023 have been released today and paint a bleak picture for the UK property market.
Sean Randall, stamp duty expert and property tax partner said: “The numbers are the worst figures for a month in over 10 years (aside from the two lockdown months of April and May 2020, when the market was closed to all but those who were already in the process of completing).”
He added: “HMRC estimate that only 67,220 UK residential property transactions took place last month. This is 32% lower than April 2022 and 41% lower than April 2021. Showing a sharp downward trend in the number of people purchasing properties. The number of transactions has been steadily declining since November last year with only a brief respite in March.”
Sean said: “The last time the number of property transactions in a month was lower was May 2020 when the country was in the height of lockdown. You would then need to go back over 10 years to February 2013 to find the next month with lower transactions than 67,220. February itself being notoriously bad for transactions due to being a short month and straight after Christmas.”
Moreover, Sean does not believe the position will improve in the coming months.
He explains: “Back in 2013 the Bank of England interest rate was at 0.5% which enabled property transactions to pick up. However, currently the interest rate sits at 4.5% and is expected to continue rising, this coupled with high inflation at 8.7% increasing the cost of living (meaning people have less disposable income to save for a property), makes it difficult to see the downward trend reversing for some time. The stagnating property market may lead to a fall in house prices, placing millions of post-Covid house buyers into negative equity and effectively preventing homeowners from selling and continuing the period of low property transactions.
“In summary, it appears that the decades of high property value growth are over and that a property crisis is looming. Will the Bank of England delay any future interest rate rises to try to rescue the market or is a property market crash a risk they are willing to take?”
UK Residential Property Transactions above £40,000
2020/21 2021/22 2022/23
May 46,160 102,980 99,760
June 67,430 214,540 103,840
July 80,660 83,520 110,030
Aug 85,050 104,320 112,950
Sept 99,070 165,730 114,740
Oct 121,740 85,890 109,960
Nov 121,180 101,880 112,350
Dec 132,900 110,220 107,430
Jan 97,810 83,620 75,630
Feb 121,260 94,090 75,240
Mar 174,080 109,760 95,000
Apr 113,790 99,520 67,220
Total 1,261,130 1,356,070 1,184,150
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