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Property sales rise in April, along with capital gains changes

Property sales rise in April, along with capital gains changes
Shekina Tuahene
Written By:
Shekina Tuahene
Posted:
31/05/2024
Updated:
31/05/2024

There was a 10% annual rise in seasonally adjusted property sales in the UK in April, totalling 90,430 during the month.

Government data showed sales were also up by 5% when compared to March. 

This rise in transactions coincided with the reduction in the higher rate of Capital Gains Tax (CGT) for the sale of residential property, according to the report. 

At the Spring Budget, it was announced that the higher rate of CGT for residential property sales would be reduced from 28% to 24%. 

However, estate agency group Hamptons analysed this could lead to some landlords paying more in tax when selling a property due to a reduction in the annual capital gains allowance from £12,300 in 2022-23 to £6,000 for 2023-24. It fell again to £3,000 for the financial year 2024-25, which began in April. 

On a non-seasonally adjusted basis, property transactions reached 79,590 in April, which was 17% higher than the same month last year and 9% lower than the previous month. 

A move in the right direction 

Industry figures said the higher transaction numbers pointed to a healthier property market. 

Gareth Lewis, managing director of MT Finance, said: “Transaction numbers are improving, showing that people are willing to buy property. The increase is not astronomical by any stretch of the imagination, but it’s a positive sign because the market is moving in the right direction. 

“However, to really see some improvement will require some sort of stimulus. It will be interesting to see what emerges from the political parties over [the] coming weeks in terms of what they are looking to achieve if they win the election. The housing market needs to be driven forwards because it is so important to the overall health of the economy. 

“While these numbers are positive, the housing market still lacks some much-needed pizzazz.” 

Kevin Roberts, managing director of Legal and General Mortgage Services, added: “A fourth consecutive month-on-month increase in sales is music to our ears, and gives us further confidence that this will be a much brighter year than 2023. The discussion around a summer base rate cut is possibly helping to fuel consumer confidence, and the market and many lenders have already priced in a reduction.

“With inflation now at its lowest point for two years, there’s plenty of reason to be confident in the outlook for our sector, and I’m looking forward to seeing where this renewed optimism and confidence can take us.” 

Josh Skelding, commercial director at Fignum, part of Bluestone Group, said: “With the spring months typically proving busier for the mortgage market, this is reflected in today’s uptick in the number of property transactions. 

“However, with an election now on the horizon, it would be fantastic to see policies from our next Government that kick the mortgage market up a gear. Affordability, both of deposits and monthly mortgage payments, remain a sizeable barrier for those hoping to take their first steps on the property ladder.” 

He added: “Therefore, while both lenders and homebuyers are responding to the stability returning to the mortgage market, more must be done to reinvigorate transaction figures – particularly amongst first-time buyers.” 

Related: Annual house price growth picks up to 1.3% in May