Figures from HMRC show the seasonally adjusted figures were up 1.1 per cent on the previous month.
Non-seasonally adjusted figures came to 114,440 which was 9.7 per cent higher than the same month last year and 4.4 per cent up on July.
The government department said residential transactions had been stable in recent months but still above pre-Covid levels. In comparison, non-seasonally adjusted transactions in August 2019 came to 111,600 while seasonally adjusted completions totalled 97,850.
HMRC also noted that the annual rise was compared to a drop in transactions following the ending of the first phase of the stamp duty holiday last year.
Highest level of transactions all year
Mortgage professionals said the latest figures showed the resilience of the market and many expressed that August had been a busy month.
Rob Gill, founder of Altura Mortgage Finance, said: “Our transaction levels in August were the highest of the year so far, a very unusual scenario indeed. Rocketing mortgage rates seem to have persuaded mortgage borrowers to interrupt their holidays and get on with securing a mortgage deal, whether it be for a purchase that might otherwise be out of reach or a remortgage that could help offset other rising living costs.
“There’s no sign of this trend slowing down, especially with the Bank of England tipped to hike the base rate significantly again in September.”
Mark Robinson, managing director of Albion Forest Mortgages, said his firm was still finding the market to be “incredibly busy, with absolutely no signs of slowing down at all”.
He also said the costof living crisis, increasing rents and rising interest rates were encouraging people to get onto the housing ladder sooner.
Rob Peters, director of Simple Fast Mortgage, agreed and said there had not been the usual summer slowdown as “savvy buyers pushed ahead to secure properties and cheap rates while they could”.
The calm before the storm
It was noted that the transactions completed in August would have begun in the spring when interest rates were lower and energy prices had just started to surge significantly.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said: “We know that demand only really started to fall from May when people had time to adjust to their new outgoings, and reconsider a move up the property ladder.
“At the same point, agents started to report that buyers were getting increasingly cautious, so we can expect some of this to show in the figures as we move into the autumn.”
Boosting market confidence
Avinav Nigam, co-founder and chief operating officer of IMMO, said housing transactions were a “good indicator of consumer confidence, and because they also affect house prices, hint at how well the economy is doing”.
Discussing the impact of changes to stamp duty which have been speculated upon this morning, industry figures said this could stir up activity in the property market driving prices and transaction levels higher.
Coles said the fact this was being considered was a sign the government was worried about activity dropping off but said there were still too many buyers compared to the number of homes available.
She added: “Driving demand without addressing supply would risk more buyers chasing a tiny number of properties, which would push prices up. This would mean higher monthly mortgage costs, which in itself could be enough to put buyers off. So, if life continues to get increasingly expensive, a stamp duty holiday wouldn’t necessarily be enough to stop the housing market slowing significantly.”
Karen Noye, mortgage spokesperson at Quilter, said part of the reason why the housing market defied expectations during lockdown was because of the stamp duty holiday in place.
She added: “If a stamp duty cut is announced on Friday, it may be enough to quell potentially dropping house prices as a result of people soon opting to stay put and avoid moving costs in the face of the energy crisis, double digit inflation and soaring food costs. Buyers could once again be tempted to move despite the macroeconomic backdrop.
“Once again, a lifeline has been thrown to a housing market could be described as already very bloated. Property transactions may therefore increase in months to come as demand increases.”
First-time buyer worries
Andrew Montlake, managing director of Coreco, said the rumoured stamp duty cut would “light a match” under transaction levels.
“However, if it sends prices higher again, this will certainly not help first-time buyers who are already facing rapidly rising mortgage rates and cost of living increases. Get it right, however, and in the medium to long term, we may just see a market with more transactions rather than one where stamp duty acts as a further disincentive to move,” he added.
