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House sales 'jumped 40% in March'

The number of homes sold in the UK jumped by 40% in March from the previous month, according to figures from HM Revenue & Customs (HMRC).

There were 60,000 property sales worth at least £40,000 each, compared with 43,000 in February.

The figures suggest that the slump in home sales seen in the past 18 months may be coming to an end.

Even when the figures are adjusted for seasonal trends, they still show a rise from 54,000 to 61,000, a jump of 13%.

The data is in line with other figures from the Bank of England, which showed that mortgage approvals rose significantly in February after stagnating for six months.

And surveyors have reported a steady rise in the number of enquiries at estate agents from potential home buyers during the past five months.

But mortgage lenders warned that a strong revival in the market soon was unlikely.

Seasonal trend?

There is normally a jump in home sales at this time of year as the property market traditionally comes back into life in the spring.

However this may not be sustained as the banking crisis, falling house prices and a drought of mortgage funds are still having a depressing effect on the market.

Property sales are still at their lowest levels since the early 1970s and are still less than half the level seen in March 2007.

Prices are also still falling according to big lenders such as the Halifax and the Nationwide, and have dropped by around 20% since their peak in the summer of 2007.

The Council of Mortgage Lenders (CML) reported last week that two million households were unable to move because they were either in negative equity, or they had too little equity to raise a mortgage on a new property.

And the Bank of England's review of trends in bank lending, published on Monday, reported that there had been only "limited" improvements in the supply of mortgages since the start of the year.

The banks attributed a recent rise in mortgage applications to purely seasonal factors, and said falling house prices and a fear of unemployment were still deterring potential buyers.

"The report confirms the CML's view that there has been a modest pick-up in housing market activity recently, but that it remains at an extremely low level," said the CML.

"Despite this small improvement, the CML does not foresee a lasting, significant increase in lending volumes until funding conditions improve," it added.