Housing market ‘slowdown is likely to be longer and deeper’ than anticipated as HMRC warns sales slumped by 25%

HMRC has said that house sales have plummeted by a quarter in April compared to the previous year and there was 82,120 transactions across the UK in the month which is a “large” fall by 25%.

In April this year residential property sales were down by 8% and HMRC said in a report the fall in sales in March and April is “particularly large.”

HMRC report said, “The number of transactions in March was high due to a combination of factors including a larger number of working days relative to April and the final month for purchases to be completed under the Government’s Help To Buy equity loan scheme.”

Earlier this week Moneyfactscompare.co.uk announced that several mortgage providers have either pulled all their whole fixed-rate range or have withdrawn certain fixed mortgage products.

The Bank of England’s interest rate hike have concerned the market and the volatility of future rate hikes forcing mortgage providers to reassess their positions.

Mike Scott, chief analyst at estate agency Yopa, said, “This disappointing number, combined with the recent equally disappointing inflation figures and the resulting increases in market expectations for interest rates, mean that the housing market slowdown is likely to be longer and deeper than we originally anticipated.”

Nicky Stevenson, managing director at estate agent group Fine & Country, said: “A slowdown in the property market last autumn as a result of the mini-Budget has fed into April’s sales figures.

“Due to the time it takes to complete on a property, many of these sales will have been agreed just as mortgage rates spiked, resulting in some transactions stalling due to affordability issues.”

Karen Noye, a mortgage expert at Quilter, said: “The spring and summer months typically bring more demand to the housing market but while inflation has finally started its descent, high mortgage rates could continue to put a dampener on transactions as moving home or taking the first step onto the property ladder becomes increasingly unaffordable.

“The Bank of England hiked its base rate to 4.5% in May and it is not expected to stop there. Lenders have continued to up their mortgage rates in response, and they are likely to increase further should the Bank hike rates again.”