Seasonally adjusted residential transactions in March showed a third consecutive month-on-month increase, up 1% from 83,040 in February to 84,200 in March, HMRC has revealed.
Non-seasonally adjusted residential transactions increased by 20% in March 2024 relative to February 2024.
Seasonally adjusted residential transactions were 6% lower than in March 2023.
In addition, seasonally adjusted non-residential transactions in March increased by 1% relative to February.
Non-seasonally adjusted non-residential transactions increased by 29% relative to the month prior, while seasonally adjusted non-residential transactions are 9% lower than a year earlier.
Reaction:
Nathan Emerson, CEO of Propertymark:
“Our member agents reported there was an [18%] increase in new properties coming to the market.
“Also, the number of mortgage approvals made to home buyers increased from 56,100 in January to 60,400 in February, according to recent Bank of England figures.
“These numbers prove that 2024 is a far better year to be making a home move.
“The Bank of England’s next announcement on interest rates is eagerly awaited and we now hope the next phase of reducing borrowing rates will help better the affordability of prospective or current homeowners happens soon.”
Andrew Lloyd, managing director at Search Acumen:
“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.
“The commercial market is similarly modest in performance, but with stability at its core. A number of buoyant sectors like technology, in particular such as the increasing demand for data centres, are feeding heavily into the overall more positive picture and carrying the weight of others being pulled down by low demand and high debt.
“Whilst we know the elevated cost of borrowing remains an obstacle for larger commercial ventures, Savills has reported that office take-up in Q4 2023 is the highest quarterly total since 2018, which holds hope for this sector as the year progresses.
“To keep the market operating at its full potential, the property industry has to focus on accelerating its digital transformation throughout 2024.
“Momentum is still being punctuated by antiquated processes that are exacerbating delays, placing unnecessary drag on deal flow.
“Digitisation is crucial for injecting much-needed efficiency across the ecosystem and maintaining the positive movement we are now seeing will require a concerted effort to streamline operations.
“A failure to do so risks relegating the market once again into stagnation.
“The green shoots we’re witnessing demand nurturing – it’s time for the property sector to embrace the future, uninhibited by legacy constraints.”
Clare Beardmore, director of distribution and mortgage club at Legal and General Mortgage Services:
“We have definitely seen the mortgage market move up a gear in 2024, after a slightly slower 2023.
“Gross lending and product transfer activity are holding strong, and it’s also been fantastic to see first-time buyers leading the charge, with lending to this group doubling year-on-year in February compared to the same month last year.
“Whether you are ready to begin your homebuying journey, coming up for remortgage, or considering a property purchase in the future, seeking support from a mortgage adviser is a really sensible first step.
“An adviser will have access to the skills, tools, and products to help you navigate the complexities of the current market and find the best solution, no matter your circumstances.”
Nick Leeming, chairman of Jackson-Stops:
“Today’s 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.”
Katie Pender, managing director of Target:
“Today’s non-seasonally adjusted figures are very encouraging and demonstrate that the market continues in good health, month on month.
“But at the same time we mustn’t forget that first-time buyers are facing the toughest conditions seen in 70 years, as last week’s Building Societies Association report on first time buyers showed.
“Affordability and supply are significant issues, and many people are also bogged down in the homebuying process.
“The latest technology is essential to speeding up that process and what we can do is to continue to support lenders and borrowers with technology adoption.”
Karen Noye, mortgage expert at Quilter:
“There has been a distinct lack of momentum in the housing market of late, and new data from HMRC today suggests that this trend persists, despite now being in a typically busier period for house sales.
“The figures reveal that though there was a small 1% uptick in seasonally adjusted residential property transactions in March compared to February, rising to 84,200, this was still 6% lower than the level of transactions seen in March 2023.
“This month-on-month increase can be attributed largely to the dip in mortgage rates at the start of the year. However, mortgage rates have since been gradually climbing back up which may have caused prospective homebuyers to put their plans back on hold.
“Higher mortgage rates still appear to be impacting buyer demand which has consequently cooled the market, resulting in this lower level of property transactions.
“New figures from the Bank of England this morning reiterates this, revealing a significant drop in the net amount of mortgage debt borrowed, which was just £0.3bn in March, a considerable decline compared to £1.6bn in February.
“Just this week, large mortgage lenders such as TSB and Halifax upped their rates, following previous rate hikes announced last week from HSBC, Barclays and NatWest due to an uptick in swap rates.
“When combined with the ongoing cost of living pressures, many prospective buyers will continue to face an uphill battle when it comes to affordability, particularly those first-time buyers who will also likely have found it much harder to save enough money for a deposit.
“Though property transactions remain subdued at present, the market could see a turning point as we approach the summer months. Bank of England figures today show new mortgage approvals rose from 60,500 in February to 61,300 in March – the highest number of net approvals since September 2022.
“The Bank of England is now expected to cut interest rates later this year as inflation has continued to ease, falling to 3.2% in March.
“A fall in interest rates could present a more favourable borrowing market and reignite demand, as many buyers have been in ‘wait and see’ mode while patiently waiting for a rate cut to ease affordability pressures.”
