House sales across the UK rose by nearly a quarter in April compared to last year figures published today from HMRC confirm that 78,ooo properties changed hands. This is a slight increase on the seasonally adjusted 74,ooo in March but is below the average of 100,ooo and way below the 133,ooo sold in April 2006.
The coincidence of the last Budget offering no stamp duty for first time buyers spending up to £250,000 gave the market the kick that no doubt Labour had hoped for. But it wasn’t enough. Whilst nationally the numbers are creeping back up there are some significant differences in individual countries. 60,000 sales in England compares to 49,000 last April whilst the 10,000 sold in Scotland in April last year was actually higher than the 7,000 last month. Wales saw sales volumes increase from 2,0000 to 3,000 and Northern Ireland maintained a thousand.
The housing market remains on the critical list despite claims from some estate agents that a recovery is underway. Transaction volumes are still well down on historic averages with the impact of the Election result, concerns over the detailed proposals for Stamp Duty charges for 2nd homes and buy-2-let together and yet another Budget on 22nd June means that things are not likely to improve in the short term.
The swift removal of Home Information Packs may give the market something to celebrate in the short term as the industry harks back to happier times but the woeful absence of any serious change in lending practices means that we may well find that what we have now is ‘the new norm’.
My biggest concern remains one of potential oversupply as more stock comes onto the market through the summer. This is not being matched by more buyers arriving onto the scene and those that do are often delusional. Only one in four homes on the market is selling at present and there are still too many people who think that they can borrow high multiples of income, who view house prices as a one way bet and who refuse to accept that ‘Prudence’, that long-term mistress in Gordon Brown has not been packed off with New Labour. She will be helping Messrs Osborne and Cable draft what is expected to be perhaps the harshest Budget of the last century as the duo try to provide some kind of fix to the Labour legacy. For now the bulk of the housing market remains in Casualty. The patient is breathing normally but remains on a life-support system.