The UK’s housing market could be returning to stability, say analysts, before deals pick up as warmer weather blankets the country.
Residential transactions for March have plunged more than a third in comparison with the same month last year, according to the government’s latest figures, after a continued, pandemic-era, buying frenzy.
Although deals have climbed 18 per cent higher than February, HMRC data showed, as gloomier weather recedes.
“Could this be the turning point with spring and summer upon us when the market finally gets some stability and pricing normalises?,” Tomer Aboody, director of property lender MT Finance, questioned.
It follows the end of the stamp duty holiday, which saw real estate agencies report record activity as buyers raced to climb the property ladder.
Despite the logistics real estate market taking off in the UK, as businesses seek to bring distribution hubs closer to home, non-residential deals sank nearly six per cent year-on-year – but have surged 36.6 per cent in comparison with February.
With non-residential transactions “still trailing behind” their residential counterparts, Aboody urged for business rates reform, in a bid to lure retailers back to high streets after a bleak pandemic period.
Cost of living squeeze
The levelling out of transactions year-on-year could signal how potential buyers are feeling less reluctant to splash the cash given the UK’s economic and inflationary position.
“The rising cost of living and interest rates, especially for those on tight budgets, are contributing to an easing of price growth and a drop in sales,” said north London estate agent Jeremy Leaf.
However, “Demand still comfortably exceeds supply and correctly-priced houses continue to attract considerable interest while mortgage repayments remain relatively affordable,” he added.
Senior pensions and retirement analyst at Hargreaves Lansdown, Helen Morrissey, chimed, explaining that Brits’ squeezed finances are ‘dampening’ the appetite for new homes.
“Comparisons with last year are tricky with the stamp duty holiday and the pandemic race for space causing a huge surge in activity but while the number of transactions is down on this time last year, it is still a massive 18 per cent up on last month’s figure,” she continued.
“How long the market can maintain this momentum remains to be seen as there are significant headwinds incoming.”