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Property transactions drop sharply in September ‒ HMRC

  • 31/10/2023
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Property transactions drop sharply in September ‒ HMRC
The number of property transactions taking place in September was down significantly on last year, new figures from HM Revenue & Customs (HMRC) have revealed.

The data showed that on a non-seasonally adjusted basis there were 92,600 residential transactions in September, down by two per cent from August and 19 per cent from the same month last year.

Meanwhile there were 10,060 non-residential property transactions over the month, which is up by seven per cent from the month before but six per cent down on an annual basis.

What can we afford?

Mark Harris, chief executive of mortgage broker SPF Private Clients, said that transactions were slipping as a result of higher interest rates and the cost of living, with borrowers reassessing what they can afford to pay.

He continued: “Swap rates, which underpin the pricing of fixed-rate mortgages, are trending down again after a recent blip. While the direction of travel for new mortgage rates is generally downwards, we have seen a few lenders pull rates in the past few days, although this has been primarily in order to slow business.”

Jeremy Leaf, an estate agent and former residential chairman of the Royal Institution of Chartered Surveyors, noted that the figures are “a little dated” as they reflect decision making from a few months ago.

“Transactions, which of course are a better indicator of market health than prices, though softening have held up than many expected this year but are likely to get worse before they improve and until mortgage rates start to fall more noticeably,” he added.

Will the deep freeze thaw?

The property market is in a “deep freeze” suggested Charlotte Nixon, mortgage expert at Quilter, with higher interest rates leading to a “remarkably quiet” summer period and transactions levels falling “off a cliff”.

She continued: “The interest rate decision later this week will also play a role in how house prices fare in the future. Inflation remains stubbornly high and if the Bank of England opts to raise interest rates once again it will prolong the dearth of demand in the market. 

“Many analysts believe that the Bank of England will opt to hold which at the least will give potential borrowers some level of stability and potentially coax some to market especially given how high rents are at the moment.”

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