HMRC estimates that there were is 97,970 residential transactions in April 2022, 13.9% lower than April 2021 and 10.5% lower than March 2022.
Non-residential transactions in April 2022 stood at 10,050, 7.0% lower than April 2021 and 16.7% lower than March 2022.
Stuart Wilson, corporate marketing director, more2life, said: “UK property transactions soared in the first quarter of this year and that trend looks set to continue into Q2 after the number of transactions again rose in April.
“Aside from supporting over-55s with their own borrowing needs, the later life lending market has also helped older borrowers to access the equity in their homes to help younger family members onto the property ladder.
“While the end to the Stamp Duty Holiday did see a small drop in lending by the bank of mum and dad as market activity continues on its strong trend, and with property prices at an all-time high, intergenerational support is becoming increasingly essential.
“Even if we do see growth start to slow, first time-buyers are likely to need all the support they can get and the older generation is likely to step up to this challenge.”
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Emma Hollingworth, distribution director, MPowered Mortgages:
“While we haven’t yet seen the high level of activity seen throughout the market in 2021, it is pleasing to see that transactions figures remain robust. Despite a further rise in interest rates, and the cost of living continuing to increase, there is still strong demand in the market. This is further proof of the resilience of our housing market and its ability to perform strongly through difficult economic times.
“However, with rates increasing at a rapid pace and with some economists predicting six more rate hikes in 2022 to a new high of 2.25% by year-end, time is of the essence for those looking to buy a home – and securing a mortgage before rates move again is paramount. The window of availability on mortgage deals is now shorter than it has ever been before, averaging just 21 days.
“At MPowered Mortgages, we are using data-driven innovation and targeted AI to help increase automation, reduce complexity, and speed up the process of receiving a legally-binding decision allowing brokers to help to secure the best outcome for homebuyers during this uncertain and volatile period for the mortgage market.”
Stuart Wilson, chief executive officer at Air Group:
“The mood music around the property market has certainly shifted in the last week or so, with swirling speculation around a dip in activity and average house prices as the cost-of-living crunch presses on. April brought hikes to the energy price cap, national insurance contributions, and council tax bills – all three of which are likely to have seen people tighten their belts and dented future purchase plans.
“However, with the property market having enjoyed strong growth over the last few years – thanks in part to the stamp duty holiday – older homeowners do have wealth tied up in their property that they can fall back on.
“Whether it is to repay an outstanding mortgage, support the younger generation or increase their retirement income, advisers should be having these conversations with their clients.
“Whether they are in the position to support them with their later life lending needs themselves or choose to refer to a trusted specialist, good advice will be critical for these individuals to help them navigate the market during these complex times.”
Chris Hutcinson, CEO of Canopy:
“A fall in property transactions won’t come as a shock when the whole of the UK is dealing with 40-year-high inflation rates and a cost of living crisis.
“It’s no wonder adults are struggling to prepare to purchase property as they adapt their spending habits, all the while ensuring a good level of financial fitness.
“As inflation rates are expected to hit double figures later this year, mortgage prices will continue to increase and push potential first time buyers out of the market. We therefore need to do all we can to help them, and this includes using their current financial habits to their advantage.
“80% of renters have never missed a rent payment, yet many don’t track this on their credit score. When financial wellness is coming into question, it’s essential that positive habits like this are tracked, and have an impact. It could ultimately give a first-time buyer the boost over the line they need to take their first step onto the property ladder.”
Emma Cox, director of real estate at Shawbrook:
“The transaction figures suggest there is still intense competition for the short supply of housing in the UK. Despite the growing pressure on household finances, many homebuyers are clearly still determined to move ahead with their purchases. Buyers are also conscious of the Bank of England’s future interest rate decisions – a significant driver in pushing people to conclude their purchases as soon as possible.
“Exceptionally strong house price growth is unlikely to defy the wider economic situation forever. Despite the shortage of supply and strong demand from serious buyers, the signals are pointing to a measured cooling of the market in the months ahead.
“Lenders are continuing to support market demand with competitive rates and favourable LTVs for those looking to complete their purchases. Mortgage rates are still relatively very low in a historical context.
“Supply is still the key issue in the UK, particularly as aging rental properties need to be brought up to more stringent energy efficiency standards. Just as the financial sector is responding to that challenge with new lending products that address the issue, further clarity from the government is needed to understand how they intend to support landlords and homeowners in transitioning to more energy efficient homes.”
Kevin Webb, managing director, Legal & General Surveying Services:
“As we race towards the middle of 2022, it’s likely that we will not see a repeat of the high activity that rushed through the housing market in 2021. Nevertheless, it is encouraging that transaction figures are still strong. Despite an increase in the Bank of England’s base rate and an ongoing rise in the cost of living, overall demand is healthy and the future market outlook is hopeful. It’s yet another sign that the UK’s housing market is robust and can weather difficult economic times without buckling under pressure.
“However, as rates continue to climb and offer conditions become increasingly complex, home surveys are becoming ever more important so prospective buyers can make informed purchasing decisions without any unknown issues arising in the future. Now more than ever, prospective homeowners need the additional expertise and reassurance that a survey can bring in one of the biggest and most expensive decisions they will make. Surveyors have a chance to share their extensive knowledge, adding value to the customer experience during a challenging time.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“There are still signs of strong activity in the market even though some of the heat has come out of it, and mortgage brokers remain exceptionally busy.
“It doesn’t help that lenders continue to pull rates at short notice, with nine lenders alone repricing on Monday.
“Mortgage pricing by smaller lenders and building societies is not as volatile as the bigger lenders but the ‘big six’ want to avoid being top dog because of the volume of business this attracts, which in turn impacts service levels.
“The strange world of mortgage pricing continues with both two and five-year fixes available at around 2.5% for those requiring 60% loan-to-value (LTV). But two-year fixes at 80% LTV can also be had for around 2.5%. There is more interest in 10-year fixes because they are priced relatively cheaply compared with shorter fixes but when it comes to signing on the bottom line, five-year fixes tend to be the mortgage of choice.’
Anna Clare Harper, director of real estate technology platform IMMO:
‘Housing transactions are important because they drive prices, which both reflect and affect our confidence, and the economy. Transactions are driven by the desire to buy, and the desire or need to sell. As a result, the annual reduction in transactions is unsurprising.
‘This time last year, the logistical complications of buying a home and moving into it through lockdowns were far outweighed by the perceived impact of the temporary stamp duty reduction on affordability for aspiring homeowners, or existing homeowners looking to upgrade. I say ‘perceived’, since the reduction in the immediate cost of buying a house resulting from the stamp duty reduction was far outweighed by house price growth, the difference being that mortgage debt used to fund the price of the house is paid off over longer period.
‘So what next? Perhaps the most interesting area of the market is what is happening with investment. This is important because the main social impact of house price growth in recent years is the growing importance of rental housing as a vital alternative to home ownership.
‘Many smaller ‘mom and pop’ landlords are increasingly seeing the 168 laws and regulations governing residential property and its management, rising interest rates and the impacts of Section 24 on their tax bills, and re-evaluating their portfolios. Many are selling up. These homes are vital for providing much needed rental homes for people and communities up and down the country. Investors looking to buy, improve and rent out these properties have a great opportunity to help improve the quality of housing as the pace of transactions continues.’
Richard Pike, Phoebus Software sales and marketing director:
“The non-seasonally adjusted figures today show that the market is now broadly back in line with the number of transactions pre-pandemic. After the heightened activity created by the stamp duty holiday this is pretty encouraging given the economic outlook.
“However, most of these completed transactions have been in the pipeline for months and we are yet to see the effect that inflation, and the increasing cost of living, will have on people’s appetite to move. That, together with another potential interest rate rise in a matter of weeks, and we could be looking at a very different picture in another three months.
“Nonetheless, even if house purchase numbers do suffer, lenders will no doubt be seeing an increase in borrowers looking to remortgage and fix their rates. It also looks increasingly like those fixed terms will be for more than the traditional 2 or 5-years.”
Conor Murphy, CEO, Smartr365:
“In spite of the ongoing cost-of-living crisis, a healthy optimism in the property sector continues to drive sound transaction volumes. While the data indicates that transactions have fallen marginally since March, when we take the broader view, it’s clear that the residential property market continues to make significant gains.”
“With that said, however, the industry must recognise there are worthwhile steps it can take to smooth the homebuying process, especially given that available housing stock continues to fall. Challenging positive demand from prospective homebuyers as efficiently and as quickly as possible will not only lead to consistent transactions volumes, but will also make for satisfied clients. Advisors should look at where mortgage tech can be used to support on some of the more time-consuming day-to-day tasks, leaving them with greater capacity to offer valuable expert advice.”
John Phillips, national operations director, Just Mortgages:
“This is the first time in six months that UK (seasonally adjusted) housing transactions have fallen from the month before and the lowest level of transactions since December 2021.
“This decrease in housing transactions suggests that fears about the continuing rise of interest rates coupled with a significant increase in the cost of living has somewhat doused enthusiasm in the market. If people have the intention or aspiration to move in 2022 then it seems to be the case of the sooner the better to secure the best possible rate for their loan but a rapidly changing financial landscape means the value of advice has never been higher.
“Further rises in interest rates this year will have a knock-on effect on mortgage rates and coupled with rising household bills lenders’ affordability calculations look set to become increasingly robust which means that this is a purple patch to get advice and possibly fix loans at the most affordable rates for the foreseeable future.“
