Fall in April transactions following Stamp Duty holiday expiration

The UK housing market continued to falter in April as buyer demand and agreed sales declined further, according to the latest RICS Residential Market Survey.

The net balance of new buyer enquiries dropped to -33%, while agreed sales fell to -31%, the lowest level recorded since August 2023.

RICS attributed the subdued activity to a combination of economic uncertainty, ongoing affordability pressures and the expiry of the stamp duty holiday at the end of March.

RICS’ chief economist Simon Rubinsohn reckons that the expiration of the tax relief had brought forward many purchases, leaving the market quieter in its aftermath.

EXPECTATIONS

Short-term expectations remain weak, with a net balance of -15% of respondents forecasting a further dip in sales over the next quarter.

However, the longer-term view is more optimistic, as a net balance of +17% expects a recovery in transactions over the next 12 months.

House prices held broadly steady in April, slipping into mildly negative territory at -3%, down from +2% in March.

Near-term price expectations also softened, with a net balance of -21%, although 39% of survey participants expect prices to rise over the year ahead.

On the supply side, new listings remained static, and property appraisals showed only marginal growth, suggesting that sellers remain cautious and inventory constraints persist.

FALLOUT

Tomer Aboody, director of specialist lender MT Finance, said: “The end of the stamp duty holiday in March saw a big push in transactions completing by the end of the month.

“We are now seeing the fallout, with transactions and mortgage approvals falling, as buyers and sellers wait to see whether the anticipated interest rate cut comes.”

TENANT PICTURE

The lettings sector also remains under pressure. A net balance of +14% of respondents reported an increase in tenant demand, up from +3% in the previous quarter.

However, new landlord instructions continued to fall, with a net balance of -26%, deepening the supply-demand imbalance in the rental market.

Near-term expectations for rent growth remain strong, with a net balance of +25% anticipating further increases.

Rubinsohn added that the chronic shortage of rental supply – despite the growth of the build-to-rent sector – means “little relief in store for tenants in terms of the upward pressure on rents.”