They dropped like a stone - that’s the verdict on property sales from a leading business analyst.
Sarah Coles of Hargreaves Lansdown is commenting on HMRC’s figures for April, just released, showing that residential sales were 67,220 in April – down 29 per cent from the previous month and 32 per cent less than a year earlier.
Seasonally adjusted, the figures are down eight per cent on the previous month but are still a hefty 25 per cent lower than a year ago.
This means that aside from the onset of the pandemic, this is the worst April for sales in a decade.
“April’s decline is a continuation of the miserable trend we’ve seen since the beginning of 2023. We had a shocking January, a worse February, and after a brief hiatus in March, April saw us revert to the downward path again” says Coles.
She anticipates some respite in the early summer, on the back of positive figures from Zoopla and RICs, but she warns that bad news is set to return later in the year.
“Sales later in the summer will reflect what’s happening in the market right now, which may not be pretty. The rise in core inflation in figures released in May saw the market price in rate rises to around 5.5 per cent. There’s a reasonable chance this is an over-reaction, and more evidence of a global slowdown could take some of the heat out of the swaps market and bring these expectations down.
“However, it meant seven per cent of mortgages were withdrawn, and a raft of repricing – pushing rates up. In the coming weeks, this could back off a little if emerging news about inflation and the economy helps dampen rate expectations. It could take a while for mortgage rates to fall back, and it’s likely to disrupt the market in the interim. If we do get more depressing news about the economy, that could also persuade people to put purchases on hold, which means the property market could be on for a difficult summer all round.”
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IS THIS NEWS? – These are the completions for April 2023, which will be much lower as we had all the sale fall thrus in Q4 last year. Looking at sale agreed figures (ie sold stc) Last week was the best for residential house sales since the Summer of 2022 with 26,861 sales agreed for the week (up 1.97% from last week Gross sales). The 2023 Running Weekly Average for sale agreeds is 22,125.
Now of course, completions pay the wages and Q1 for many agents was truly awful for cash flow because of the high number of sale fall thrus in Q4 (an average of 38.7% fall thru rate in Q4 compared to a 7 year year long term average 24.3%).
I am over optimisticon the sale agreed figures … of course sale agreed pipelines are like a house of cards and could collapse over night … yet you still need a sale agreed to make a completion…and 2023 for sale agreed has been so far, very good (we are a Country 94.5% of the 2017/8/9 average for net sales – ie sales after fall thrus).
Could it all go t*ts up??? – yes!
Just because I’m optimistic, doesn’t mean I’m naive to reality.
I’m just aware of the opportunities and the possibilities that can be nurtured through optimism, clarity, and execution. There’s nothing wrong with optimism. It’s better to be optimistic and wrong than pessimistic and right.
And if things do go t*ts up, there will still be a property market and the best estate agents will thrive ..again, me being optimistic
Just like the economy, the property market is cyclical and so it is not surprising that life is increasingly hard for agents at present and likely to continue to be so for the foreseeable future. I'm a short-term pessimist, but a long-term optimist, given that in due course renewed economic expansion and continued population growth, in association with a chronic shortage of residential properties, will propel prices upwards again. However, in the short-term, the odds are stacked against the housing market and further deterioration in both prices and volumes seems unavoidable. Hence my conviction that 'retrenchment' is the watchword at present: judicious cost-cutting and a laser-like focus on cash-flow are prerequisites for survival. I remember the late 80s / early 90s when the property market experienced significant turbulence, and a similar scenario may be brewing today. The speed of modern life has lulled too many people (often egged on by media expectations) into desiring quick fixes to problems, but sometimes there's no alternative to putting on a tin hat and toughing it out.
Agents need to stop pandering and start advising. If everyone got a grip on their pricing, and said it as it is, then the rest will follow irrespective of the market.
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