House sales higher in March than a year earlier
House sales edged down only slightly in March compared with February, despite the lockdown imposed towards the end of last month, new figures suggest.
Across the UK, 99,440 residential property sales took place in March, which was 0.2% down on February, according to provisional estimates from HM Revenue and Customs (HMRC).
The March total was also 0.3% higher than the same month a year earlier, despite stricter measures introduced from March 23 2020 to limit the spread of coronavirus.
The Government has told people who had been on the brink of moving home that there is no need to pull out of transactions, but they should do all they can to amicably agree moving at a later date.
Moves may still go ahead in certain circumstances; for example, if the property being moved into has been left vacant.
People who have houses listed for sale should not currently allow anyone into their home for viewings, the Government has said. Sellers can still accept offers, although any sale agreed is highly likely to take longer than usual to go through.
Estate agents have reported some deals being done where the buyer has not physically viewed the property. Many agents are offering “virtual viewings” of properties online.
Commenting on the figures, Tomer Aboody, director of property lender MT Finance, said: “Residential transactions fell slightly in March compared with February, perhaps suggesting that the possible impact of Covid-19 was starting to be felt, even before the full extent of the crisis had become apparent. That said, residential transactions were still higher compared with March 2019.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said the figures confirm “what we saw before lockdown and what has been happening since – in other words, release of significant post-Brexit pent-up demand in the early part of the quarter, then very little activity”.
Mr Leaf continued: “They show too a wave of demand likely to be released soon as buyers and sellers are telling us they are putting their plans on hold, provided damage to their own prospects and the wider economy is relatively short-lived, and financial support from the Government can be maintained.”
HMRC’s figures are based on completed UK property transactions with a value of £40,000 or above.
Home-buyers are generally given 14 days to submit their stamp duty returns, but HMRC’s latest report said estimates for March are provisional, as they are based on incomplete data – transactions for which the return is yet to be received.
Nick Leeming, chairman of estate agent Jackson-Stops, said: “Today’s data from the HMRC shows that, despite the country being in lockdown for just over a week in March, residential property transactions were up by 0.3% when compared to transactions in March 2019, with more than 99,000 made. This on-the-year increase provides a real indication of the uplift in the property market ahead of Covid-19.
“Many of these buyers would have been in the process of purchasing a property just before Covid-19 came to the UK, and so most of these transactions will be the result of that. However, there were also last-minute transactions between eager buyers and sellers looking to make a deal before lockdown.
“April and May’s data is likely to show a short-term, downward trend, with many buyers placing their activity on hold throughout April due to not being able to view properties in person and challenges around the completion process.
“That’s not the case for everyone, however. We have continued to see transactions, which have abided (by) social distancing rules, and have even seen some deals going through where the buyer hasn’t visited the property at all – showing there is still an appetite to transact.”
Shaun Church, director at mortgage broker Private Finance, said: “The real question is, what happens to the market after the lockdown is lifted? There’s no guarantee it will bounce back to pre-coronavirus crisis levels.
“Although there will be some pent-up demand, how much remains to be seen, given the scale of the economic shock.
“There are ways the Government could rekindle the flame however – making changes to ‘second stepper’ and ‘final stepper’ stamp duty would help.”