Anna Clare Harper, CEO of SPI Capital, said: "HMRC’s latest transactions data release is shocking, but unsurprising, with housing transactions 179.5% higher than April 2020 and 35.7% lower than March 2021."
Following the April HMRC transactions data, which found that transaction numbers had dropped since March, commentators were clear that this should not be a cause for concern for the market.
Anna Clare Harper, CEO of SPI Capital, said: "HMRC’s latest transactions data release is shocking, but unsurprising, with housing transactions 179.5% higher than April 2020 and 35.7% lower than March 2021.
"On the surface, this looks like a boom, to be followed shortly by a bust.
"However, what tends to happen in the housing market is different from what happens with other purchases and investments.
"The consequences are also different. In other sectors, low consumer confidence tends to reduce consumer spending, and low investor confidence tends to cause emotional selling.
"But housing is ‘essential’, and interest rates are very low, which means that the cost of keeping it is relatively low. People are less likely to sell unless they really need to.
"They still need a place to live, and in many cases, interest rates are so low that it is actually cheaper each month to pay a mortgage on an equivalent property than to pay rent, once you have put down a deposit."
However, Harper added that there are some concerns about future trends.
She said: "As a result, we likely to see widening inequalities between the ‘haves’ and the ‘have-nots’ in terms of home ownership.
"This will disproportionately, but not exclusively, affect younger generations.
"The importance of the rental market will increase - socially, politically and economically."
Andrew Southern, chairman of Southern Grove, agreed that the dip in April was not a cause for concern.
He said: “The housing market continues to roar and just because the picture has dipped compared to March, that doesn’t mean the boom is over."
Southern explained that recent highs have been created by the stamp duty holiday, but that demand will likely continue to stay strong due to other factors.
He said: “A spike in activity ahead of the original stamp duty deadline disguises what is still a strong performance as the housing market continues to benefit from a moving frenzy.
"That’s not only due to the extension of the tax break and still has much to do with a widespread and persistent hunger among homeowners to upsize.
“Sales volumes are still firing on all cylinders and beating historic averages by some margin, though this staggering annual increase is mainly rooted in what happened last spring.
"The market had frozen over as the pandemic took hold and these figures reflect those dark times. People had to slam on the brakes as they waited to see how the pandemic unfolded."
Southern added that any negative change would be unlikely to happen until later in the year.
He said: “If a little more air is going to hiss out of the market, that’s unlikely to happen until the Chancellor’s giveaway wanes in the autumn.
“Any doomsayers predicting a crash will probably turn out to be wrong.
"The government’s 95% first-time buyer loans have thrown the door open to those who would have otherwise struggled to afford their own home and this will continue to draw all-important newcomers into the market.
"As a result we may not see sales volumes fall any further over the summer.”