Latest increase in property sales indicates ‘a reviving property market’

Residential property transactions reached an estimated 84,200 in March, 6% down year-on-year but 1% higher than the previous month.

The data from HMRC showed this small rise marked the third consecutive month that residential property transactions increased on a seasonally adjusted basis.

On a non-seasonally adjusted basis, residential property transactions in the UK totalled 86,980, which was 9% lower than March last year and 20% up on February this year.

Commenting n the data, Iain McKenzie, CEO of The Guild of Property Professionals, said: “A third consecutive rise in home sales in March indicates a reviving property market, as improving economic conditions ease household financial burdens.

“With inflation declining, mortgage approvals on the rise, and rumours of an imminent base rate reduction by the Bank of England, buyer confidence has received a much-needed boost in 2024.

“Buyers have adjusted their expectations in line with the changes in their affordability, but sellers are also much more open to negotiate, helping to get more sales over the line.

“This improving economic outlook has also been encouraging more first-time buyers who were previously hesitant or struggling to enter the market due to higher mortgage rates.

“If we finally see a reduction in the Bank of England’s base rate next week — which has remained at 5.25% since August last year — this could provide a significant boost to sales as we move further into 2024.

“Such a move would enhance affordability, enabling more prospective buyers to secure their dream properties.”

Also in response to the HMRC property transactions data, Nick Leeming, chairman of Jackson-Stops, commented: “The figures show that the property market is on an even keel with a steady base of completions in the first quarter and a healthy pipeline of buyers coming through.

“Across Jackson-Stops’ own national network in March, we saw a positive uptick in new instructions, supporting the view that that market is paving the way for a more active summer. This is reflected in mortgage approvals being significantly up from last year, starting to make a long-awaited return to pre-pandemic levels. Buoyed by falling inflation, the possibility that interest rates will soon be cut would be another strong vote of confidence to help grease the wheels of the market and ease the downward pressure on house prices.

“With local elections on the horizon and a general election this year, policy promises and party pledges will become a growing topic of conversation for current and prospective homeowners to pay close attention to. But if the market’s track record of navigating external headwinds is anything to go by, lifestyle factors and short supply will likely endure as the driving forces to keep transactions pressing ahead at full steam.”

Andrew Lloyd, managing director at Search Acumen, remarked: “The latest property transaction figures from HMRC suggest cautious optimism may be on the cards as we head into the summer season. Whilst the uplift in both residential and commercial transaction volumes is modest, the upward trajectory for the second consecutive month signals that the market is slowly regaining its footing after a turbulent 2023.

“On the residential front, the marginal increase aligns with our cautious expectations of a gradual recovery. As economic conditions stabilise and the traditional spring market defrosts from hibernation, more prospective buyers are feeling ready to take the plunge into homeownership, reflected in Zoopla’s latest report showing a 12% annual increase in sales agreed.

“This month, we have also seen housebuilders give their vote of confidence behind signs of recovery announcing more positive year-end results – an indication the new homes sector may also be on the incline. However, we’re still approaching this tentative rebound with some scepticism, as lingering affordability constraints could still serve as a blocker to progress.”

Nicky Stevenson, MD at Fine & Country, added: “Uncertainty around interest rates is creating a sense of the limbo in the property market, with many would-be movers and buyers adopting a wait and see approach.

“While the number of transactions is down on the year before, it’s positive to see that they are seeing a marginal month-on-month increase.

“Mortgage approvals continue to rise, with the Bank of England revealing today that the 61,300 deals agreed for house purchases hit the highest number since September 2022.

“It’s good news for consumers that the effective interest rate on new mortgages fell to 4.73% in March, but everyone is waiting for a wholesale reduction in interest rates to bring deals down further.

“Buyers have a window of opportunity to secure a deal on their next home, as there is a solid amount of properties to view and compare, and vendors continue to be open to negotiation.”