Further signs of UK property slowdown in April

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There were further signs of a slowdown in the property market in April, as the number of sales fell significantly, while fewer people took out mortgages.

The number of residential property transactions in the UK dropped by 22.5% between March and April, according to HM Revenue and Customs (HMRC).

Analysis by the data firm Equifax also suggests that mortgage sales declined by 16% over the same period.

But the figures are skewed by a series of tax changes this year and last.

In April 2016, landlords became liable for a higher rate of stamp duty. And since last month, they have been able to claim less in tax relief on mortgage interest payments.

The effect of the changes was to boost sales in March 2016 and March 2017.

As a result, the number of sales fell from 107,090 in March to 83,010 in April on a non-adjusted basis, HMRC said.

Once seasonal factors are taken into consideration, the number of transactions fell by 3.2%.

Both the Halifax and Nationwide have reported that prices fell in April.

‘Nosedive’

Some commentators said the figures showed that the market was holding up relatively well.

“At first glance, one might think these figures are hugely disappointing, but when you consider what was happening this time last year and what has happened to property transactions in the past few months, they represent steady progress for the housing market,” said Jeremy Leaf, a London estate agent.

The number of landlords taking out mortgages last month saw a particular drop, with sales falling by 20.4% to £2.15bn, according to Equifax.

But ordinary buyers also shied away from the market, with mortgage sales dropping by 15.1%.

“Mortgage figures have nosedived following a strong first quarter, with every single region experiencing a notable slump in sales,” said John Driscoll, director at Equifax Touchstone.

“Government measures to cool buy-to-let property sales, including the phased cuts to mortgage interest tax relief which started on 1 April, have no doubt played a role in diminishing sales figures last month.”

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