House sales up 40% in March
House sales jumped by 40% during March but still remain significantly lower than numbers seen in the same month last year and at the height of the housing market boom in 2007.
Figures from HM Revenue & Customs (HMRC) show there were 60,000 sales of property worth more than £40,000 in the month of March, up from 43,000 in February and 41,000 in January.
Andrew Montlake, spokesman for independent mortgage broker Coreco, says: “There is a growing consensus that the worst of the housing crisis may now be behind us and on the surface these latest figures appear to support this theory.”
However, despite the jump in property sales, this still compares unfavourably with the numbers seen in previous years. In March 2008 (when the housing downturn was already well underway) there were 83,000 sales and in the same month in 2007 there were a whopping 141,000 sales.
HMRC’s figures show property sales peaked in June 2007 with 163,000 transactions recorded during the month. In comparison, the slowest month was January this year.
The figures confirm that a spring bounce has given the housing market a slight uplift. The Royal Institution of Chartered Surveyors recently reported that buyer interest continued to grow in March, resulting in a greater number of sales versus the amount of property on the market.
Mortgage lending, currently one of the main barriers to homeownership, also seems to be improving. New figures from the Council of Mortgage Lenders (CML) show banks and building societies issued mortgages worth £11.5 billion in March, up 16% from February.
But, like housing transactions, this rise is from a low base, with the annual figures painting a different picture. Since March 2008, mortgage lending has declined by 52%.
In addition, total lending during the first three months of the year is also down from the final quarter of 2008. The CML reports gross lending for the first quarter of 2009 was £33 billion - a 29% decline from quarter four 2008 and the lowest quarterly lending total since the first quarter of 2001.
Michael Coogan, director general of the CML, says: “While the market is beginning to show some signs of stabilising, housing transactions and lending are set to remain low for the foreseeable future.”
The two sets of figures come ahead of Alistair Darling’s annual Budget, which will be published at 12.30pm on 22 April.
It is hoped that the chancellor will announce new measures to help tackle the housing crisis. Commentators have called for an extension of the stamp duty holiday, more low-cost housing and additional help for struggling borrowers.
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.