House sales were down by more than a third in March compared with a year earlier, according to HM Revenue and Customs (HMRC) figures.
An estimated 114,650 property transactions took place last month, which was 35.7% lower than March 2021 and a 2.6% increase compared with February 2022.
HMRC said year-on-year comparisons should be treated with caution.
A year earlier, home-buyers had been rushing to beat the stamp duty holiday deadline.
The stamp duty holiday has distorted the data
The stamp duty holiday was originally due to end in March last year but it was extended in the March 3 2021 Budget.
There would however have been many house sales which were already lined up to complete in March last year, before the announcement of the extension was made. This meant sales which may otherwise have taken place later on were bunched up.
Despite last month’s total being lower than March 2021, it is still one of the strongest sales months seen in March in recent years.
In March 2020 92,060 house sales took place and in March 2019 – before the coronavirus pandemic – the total was 98,500.
Andrew Montlake, managing director of mortgage broker Coreco, said: “The stamp duty holiday has distorted the data so it was inevitable that transaction levels in March were down fairly significantly on the same month last year.
“To make matters worse, there is an extraordinary lack of stock.”
The increased costs of moving home will likely put off prospective buyers and taking a first step on to the property ladder will be pushed out of reach for many, and the number of property transactions could well be driven down as a result
Karen Noye, a mortgage expert at wealth managers Quilter, said: “It is important to note that March 2021 was the original withdrawal date of the stamp duty holiday and thus saw a huge uptick in sales as people pushed to secure the savings.”
She continued: “With wages failing to keep up, the increased costs of moving home will likely put off prospective buyers and taking a first step on to the property ladder will be pushed out of reach for many, and the number of property transactions could well be driven down as a result.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Some heat has come out of the purchase market compared with this time last year, which is no surprise and is welcome as that frenetic pace could not continue.
“Re-mortgaging activity is strong as borrowers attempt to lock into low mortgage rates before they disappear.
“There are concerns that rising living costs will impact lenders’ affordability calculations when it comes to getting a mortgage, making it more important than ever to seek advice.”
Demand still comfortably exceeds supply and correctly-priced houses continue to attract considerable interest while mortgage repayments remain relatively affordable
Andrew Simmonds, director at Bristol-based Parker’s estate agents, said: “The past few weeks have seen an increase in new instructions and buyers seem to have become more active again. As the weather improves, so does the property market by and large.
“There is still limited stock and that is hampering transaction levels. As ever, properties for sale at the right value sell very quickly.”
Nick Leeming, chairman at Jackson-Stops, said: “Whilst current pricing levels are still tempting home-owners on to the market, the ongoing imbalance between stock and demand could serve to keep prices rising but transaction numbers tempered through the course of year.”
Jeremy Leaf, a north London estate agent, said: “Demand still comfortably exceeds supply and correctly-priced houses continue to attract considerable interest while mortgage repayments remain relatively affordable.”
