The Inside Edge
A significant rise in the number of homes sold in the UK was recorded by HM Revenue and Customs (HMRC) in March and they claim that this is largely down to a seasonal ‘spring bounce’ that is evident in the housing market on an annual basis. HMRC also suggest that the Stamp Duty holiday has had an effect on property figures for the earlier part of the month.
HMRC recorded 74,000 sales during March as opposed to 63,000 for the previous month with Gross Mortgage Lending up by 30% over the same period according to the Council of Mortgage Lenders (CML).
This is the third year in a row that housing market activity has increased sharply from February to March but the figures are still some way short of those declared during the most recent housing boom. Sales activity for March 2012 stands at around 50% of the number of transactions recorded in March 2007.
In the meantime, the British Bankers Association (BBA) have produced a set of figures which at first glance seem slightly at odds with the claim that gross lending had risen sharply. The organisation indicated that mortgage approvals slumped alarmingly in March and they now stand at a ten month low.
Approvals had hit a two year high of 37,977 in January but after falling back to 32,840 in February they have dropped further to 31,888 in March. The BBA also point to the Stamp Duty Holiday as a reason for masking some of the figures but Howard Archer of IHS Global Insight fears that these figures indicate a worrisome trend that could lead to a depressed period for the UK housing market.
Moreover, Mr Archer is concerned that news confirming Britain’s return into recession will have severe implications for the property market as a whole.
“The housing market may well be hit by heightened consumer concern over the economic outlook following the news that the UK is officially back in recession with gross domestic product contracting 0.2pc quarter-on-quarter in the first quarter,” Mr Archer said.
“It is also possible that housing market activity and prices will be softer in the near term as a result of the stamp duty concession having brought forward a significant amount of fist-time buyer activity,” he added.
As we’ve seen in recent weeks, the recent Stamp Duty Holiday has been given credit for inflating many of the statistics within the property market within the first three months of this year. It had been widely expected that those statistics would be lower for the rest of 2012 but with consumer uncertainty over the recession, there are clear fears of an alarming slump.