Home sales fell by a quarter in April compared with the same month a year earlier, according to data from HM Revenue and Customs (HMRC).
Across the UK, there were estimated to be 82,120 transactions in April, down 25% on the same month last year. Residential property sales also declined by 8% in April as compared to March.
The HMRC report said the monthly decline in sales “appears to be particularly large”.
“The number of transactions in March was higher due to a combination of factors, including a larger number of working days relative to April and the last month for the government’s help to buy equity loan scheme,” it said.
Mike Scott, chief analyst at estate agency Yopa, said: “These disappointing numbers, combined with recent equally disappointing inflation data and rising market expectations for interest rates, mean that the housing market recession is over.” likely to be longer and deeper in comparison.” We originally guessed.
Nicky Stevenson, managing director of estate agent group Fine & Country, said: “The slump in the property market last autumn as a result of the mini-budget has dented sales figures for April.
“Due to the time it takes to complete on a property, many of these sales will be agreed as mortgage rates have increased, resulting in some transactions stalling due to affordability issues.”
On Tuesday, Moneyfactscompare.co.uk said a number of mortgage providers had withdrawn selected fixed mortgage products in recent days and some had pulled their entire fixed rate range.
Moneyfactscompare.co.uk suggested the volatility is due to concerns about future interest rate hikes and lenders re-evaluating their offers.
Data from the Office for National Statistics (ONS) recently showed inflation slowed to 8.7% in April, although the decline was expected to be far greater, with experts reporting a decline of 8.2% in April.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Transaction numbers are coming under pressure due to high interest rates and cost-of-living uncertainty.
“Swap rates, which underpin the pricing of fixed-rate mortgages, have risen again on the back of inflation news. Lenders are busy pushing their fixed rates upward.
Karen Noy, a mortgage expert at Quilter, said: “The spring and summer months usually bring more demand to the housing market, but when inflation finally starts to drop down, higher mortgage rates will come in the form of a take or take home. May continue to freeze transactions The first step on the property ladder becomes increasingly ineffective.
“The Bank of England raised its base rate to 4.5% in May and it is not expected to stop there. Lenders have continued to raise their mortgage rates in response, and they are likely to increase further if the Bank raises rates again.”
Andrew Montlake, managing director of mortgage broker Coreco, said: “In recent months, we have seen the market begin to wake from its long slumber, with buyers returning and getting used to the new mortgage rate environment.
“That was, of course, before the latest inflation data caused swap rates and therefore mortgage rates to start rising again.
“This will certainly impact customer affordability, mortgage choice, and therefore transaction levels going forward.
“With many expecting Q2 to be the beginning of a new normal market, it now looks like it will be pushed back to Q3.”
Jason Tebb, CEO of property search website OnTheMarket.com, said: “The past week has shown that further volatility cannot be ruled out as inflation, while deflation, is proving more stubborn than forecast.
“With the prospect of further increases in interest rates and lenders pulling their mortgages and re-rating upwards, borrowers are likely to be concerned about affordability.
“While there are people who need to move and do so regardless, sellers should price their properties sensibly to secure successful transactions in the coming months.”
Jeremy Leaf, an estate agent in north London, said: “Sales are taking longer and there is not the same urgency as before.”
Chris Druce, senior research analyst at estate agents Knight Frank, said: “The fall in monthly property transactions, although boosted by the buyout completion deadline to aid following March’s performance, provides a reality check for the health of the market.
“An improved economic outlook and solid jobs market have supported buyer sentiment in recent months and created an active spring sales market, last year’s mini-Budget took the sector by storm.
“However, the cost of a mortgage is significantly higher than it was 18 months ago, and more pain will enter the system this year as people’s fixed-rate mortgage deals come up for renewal.”
Jonathan Hopper, CEO of Garrington Property Finders, said: “It is a buyer’s market in many parts of the UK and competitively priced homes are selling well.”
Ian McKenzie, CEO of the Guild of Property Professionals, said: “While sales may be slowing, estate agents are using the quieter period to replenish their stock. Should see an improvement in sales in the first half.