Home Property Finance & InvestmentMortgages Leading tax and advisory firm Blick Rothenberg highlights the weakness of the UK property market

Leading tax and advisory firm Blick Rothenberg highlights the weakness of the UK property market

by LLP Finance Reporter
31st May 23 4:57 pm

HMRC’s provisional estimates for UK residential property transactions for the month of April 2023 have been released today and paint a bleak picture for the UK property market, say leading tax and advisory firm Blick Rothenberg.

Sean Randall, a stamp duty and property tax partner with Blick Rothenberg said: “The numbers are the worst figures for a month in over 10 years (aside from the two lockdown months of April and May 2020, when the market was closed to all but those who were already in the process of completing).”

He added: “HMRC estimate that only 67,220 UK residential property transactions took place last month. This is 32% lower than April 2022 and 41% lower than April 2021. Showing a sharp downward trend in the number of people purchasing properties. The number of transactions has been steadily declining since November last year with only a brief respite in March.”

Sean said: “The last time the number of property transactions in a month was lower was May 2020 when the country was in the height of lockdown. You would then need to go back over 10 years to February 2013 to find the next month with lower transactions than 67,220. February itself being notoriously bad for transactions due to being a short month and straight after Christmas.”

Moreover, Sean does not believe the position will improve in the coming months.

He explains: “Back in 2013 the Bank of England interest rate was at 0.5% which enabled property transactions to pick up. However, currently the interest rate sits at 4.5% and is expected to continue rising, this coupled with high inflation at 8.7% increasing the cost of living (meaning people have less disposable income to save for a property), makes it difficult to see the downward trend reversing for some time. The stagnating property market may lead to a fall in house prices, placing millions of post-Covid house buyers into negative equity and effectively preventing homeowners from selling and continuing the period of low property transactions.

“In summary, it appears that the decades of high property value growth are over and that a property crisis is looming. Will the Bank of England delay any future interest rate rises to try to rescue the market or is a property market crash a risk they are willing to take?”

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