House sales have plummeted: is this a true picture of the UK housing market?

UK house sales declined steeply in April during the Covid-19 lockdown; was this a temporary blip or a sign of worse things to come?

house sales
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It's official: house sales took a nose dive in April, as Covid-19 lockdown measures kicked in, putting a halt to most property transactions, mortgage approvals, and house moves. Most, though not all – the latest HMRC data shows that there were 46, 440 residential property transactions in April 2020. 

This figure, of course, looks stark when put into context of pre-lockdown house sale activity. Property transactions in April 2020 were 53.4 per cent lower than in April 2019, and 46.1 per cent lower than in March this year. 

A huge decline by any measures, and yet – is this statistic a grim indication of a downward spiral, or will the property market be able to recover fairly quickly? With the financial crisis of 2008 increasingly being evoked as the benchmark for the steep decline in house sales, will we see another long climb back to normal transaction levels or not? 

There is some indication that despite the worrying plummet in house sales numbers, the housing market may actually be doing better than it might initially seem. It may be worth considering the numbers not in how they compare with last year, or even with last month, but with the alternative scenario where property transactions ground to a complete halt, which never materialised. Marc von Grundherr, director of lettings and estate agent, Benham and Reeves, commented:

'The numbers painted here are stark, yet surprisingly positive in the sense that we were expecting a cryogenic market freeze during lockdown, but some homebuyers either didn’t get the memo or stuck to their guns regardless.  

'Of course, it remains to be seen what the longer term effects of COVID-19 will be on transactions. The bottom line impact on any area of the market often takes some months of backtracked reporting to materialise and there’s no doubt that this will be the case where transactional decline is concerned.

'The good news is that buyers are back in force and market activity will recover as a result, albeit at a pace that current procedures allow.'

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