Real estate transactions have fallen to the lowest level since the start of administration, HMRC says
Residential sales have fallen to their lowest level since records began in 2005 last month, new figures from HM Revenue & Customs show.
In April, 38,060 transactions were completed, which is less than half the number seen at the same point a year ago.
Now that the government has been given the green light to get moving again, the real estate industry is trying to shift its activities to ensure that buyers, sellers and staff can adhere to social distance measures while the deals keep moving.
Transactions over time: Real estate transactions in the UK since 2005
Expected: Residential sales fell to their lowest level since records began in 2005 last month, HMRC figures suggest
According to the new figures from HMRC, which she says should be treated with “some caution”, housing transactions in April this year were 53.4 percent lower than in April 2019 and 46.1 percent lower than in March this year.
Lockdown measures blocked the housing sector and caused real estate agents to close their doors, relocations were postponed and delivery dates were in chaos.
The government estimated that approximately 450,000 buyers and tenants of lease contracts affected their pandemic plans by the pandemic.
HMRC’s figures show completed sales valued at £ 40,000 and above, but warned that the latest releases have some uncertainty and are therefore tentative.
The report said, “Impacts of Covid-19 are evident in the latest HMRC UK transaction data.”
Jeremy Leaf, a North London real estate agent and a former chairman of RICS, said, “Of course, it’s always transactions rather than more volatile prices that are a better measure of the strength of the housing market at this particular time.
This data comes at a particularly interesting time just after the Covid-19 bomb hit, so one of the first to reliably assess the damage.
Impact: The government estimated that their pandemic plans were affected by the pandemic in approximately 450,000 buyers and tenants
“This was significant and probably worse, while new normal values are being established.
“More positively, activity has increased significantly since we returned to work, at least in part, although it will take several months for interest to develop into offers and completions and is reflected in this or similar reports.”
Meanwhile, Joshua Elash, director of real estate finance company MT Finance, says, “The April figures show how dramatically the lockdown has impacted the real estate market with hugely repressed housing transactions.
“At a time when the government is spending at an unprecedented rate, the corresponding drop in revenue will further aggravate the economic downturn in our response to Covid-19.
“We expect May’s data to be comparable if not worse. We must get the market fully open and get it back to work as soon as possible if we want to specifically limit the damage to the economy as a whole and the real estate sector. ‘
HMRC’s latest transaction figures are based on its own records, together with those of relevant authorities in Scotland and Wales.
Figures published this week by the Office for National Statistics suggest house prices across the country have risen 2.1 percent or £ 5,000 in the year to March, with average asking prices now around £ 232,000.
In London, house price inflation rose 4.7 percent in the year to March, marking the largest annual jump since December 2016.
House prices in London remain the most expensive at an average of £ 486,000. The Northeast still had the lowest average house price, £ 127,000, and is the only English region to surpass the pre-economic downturn in July 2007.
Some industry insiders believe pent-up demand has increased among buyers during the lockdown.
Real estate website Rightmove said it registered the busiest day since Thursday, March 5, on Tuesday this week, with nearly 5.3 million visits.
Areas in Manchester, Liverpool and Leeds showed a particularly large increase in buyer searches compared to a year ago, Rightmove added.
Miles Shipside, Rightmove’s housing market expert, said: ‘A week after the surprising opening of the housing market, agents are still showing caution and putting safety first, but many had already started preparations during the shutdown and could therefore begin to reopen their branches and hold viewings. ‘
Phased reopening begins nationwide
Rural has started a phased reopening of its offices after the government gave the housing sector green light last week to get moving again in England.
The broker group said social distance measures “resonated well with our colleagues and clients,” but added it was too early to provide financial guidance.
In the four months to April 30, the company’s adjusted underlying earnings were ‘significantly’ ahead of last year thanks to a £ 50 million pipeline constructed prior to the close.
In the year ending December 31, total income fell 3 percent to £ 498 million, after an impact of £ 12 million on the rental ban.
The loss from continuing operations decreased to £ 37 million, from £ 224 million back in 2018. The group said it currently had around £ 60 million in the bank.
The group’s share price rose by more than 5 percent earlier today.
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