Property sales (non-seasonally adjusted) were down 32% in a year in September, but in line with August’s figures at 112,370, according to HMRC.
But HMRC warned against annual comparisons, because last year’s sales were massively distorted by the rush to take advantage of the Stamp Duty holiday.
Sales are steady, and above pre-pandemic levels (13% above September 2019). It’s the second busiest September in a decade.
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Sarah Coles, senior personal finance analyst, Hargreaves Lansdown:
“House sales plummeted by a third in the year to September, but this shuddering drop isn’t what it seems, because September sales were actually well above their pre-pandemic levels. They were just being compared with a huge spike when the stamp duty holiday came to an end. The real house sales horror story will play out in the coming months.
“Sales completing in September were largely agreed around June, when demand had started to drop back a little, as rising prices persuaded some to rethink. However, while mortgage rates were rising, the average two-year fixed rate was 3.61% (according to Moneyfacts), so for an awful lot of buyers, monthly payments still felt within the realms of affordability.
“Sales agreed in the coming weeks are likely to look far uglier, as the chaos unleashed by the mini-budget pushed mortgages well out of reach for an awful lot of buyers.
“Moneyfacts puts the average two-year fixed rate almost three percentage points higher than the June figure – at a 14-year high of 6.53%. We can expect this to hit completion figures towards the end of this year and into the beginning of 2023, when today’s sense of mounting dread feeds into the figures.”
Emma Hollingworth, distribution director at MPowered Mortgages:
“It is not surprising to see that property transactions are down compared to last year, following pressure on would-be buyers in the form of interest rate rises, in particular, and with wider market uncertainty also playing a role.
“This said, demand remains consistent against last month signaling that ‘proceed with caution’ is the overall sentiment amongst homebuyers. With unemployment numbers remaining low, demand remains, particularly amongst those eager to lock in rates before they rise further – and certainly ahead of the next base rate decision.
“Our research shows that in 2022, one out of three homes have received an offer within an hour of viewing – showing a clear indication of the speed at which the market continues to move.
“Brokers’ role remains to support homebuyers through this process as quickly and seamlessly as possible. At MPowered Mortgages, we use the power of AI to simplify the mortgage journey for the benefit of both brokers and their customers.”
Simon Webb, managing director of capital markets and finance at LiveMore:
“The demand for home buying is still strong but steady as evidenced by September’s housing transactions data remaining the same as the previous month.”
“The large annual drop of 32% (non-seasonal figures) and 37% (seasonal) is due to the ending of the stamp duty holiday last September when buyers surged to get their transactions over the line before the deadline closed.“
“We would expect the housing market to start cooling as mortgages rates are rising fast and the cost-of-living crisis puts a strain on people’s finances. To add to this financial pressure, the Bank of England is expected to raise the base rate again next week to try to curb inflation, with the market expecting an increase as much as 1%.”
“Demand however, is still there, despite house prices continuing to rise, albeit at a slower growth rate than last year when the market was fuelled by the stamp duty holiday. The recently announced stamp duty change could also prop up the market for homes under £500,000. The bottom line is a shortage of houses for sale and not enough new property is being built fast enough to keep up with demand.”
John Phillips, national operations director at Just Mortgages:
“It’s important to recognise that a year-on-year comparison is still something of an anomaly due to the stamp duty holidays creating transaction peaks so it’s more telling to recognise that transactions levels are largely the same as pre-covid.
“Despite the housing market being in the grip of what many will consider the perfect storm of high inflation, rising rates and housing budgets stretched with the cost-of-living crisis the mortgage market once again showed its resilience. UK average house prices increased by 13.6% over the year to August 2022 and this latest data shows that housing transactions maintained the same levels as the previous month.
“Housing stock is still outstripping demand and the housing sector had a shot in the arm with favourable changes to stamp duty so although customers may be paying higher mortgage rates than they are used to, the appetite to borrow is still there.
“However, what continues to be concerning is extended completion times that are around 22 weeks. This creates a significant window of opportunity for housing chains to break and mortgage offers to expire which creates stress for borrowers and makes the provision of professional mortgage advice more important than ever.”
Avinav Nigam, Cofounder of real estate investment platform, IMMO:
“Housing transactions are a vital indicator of demand, and how easy it is for people who want to, to buy and sell. They are important because transactions drive house prices. House prices are often used as an indication of how well the economy is doing, and much of our nation’s wealth is represented by residential real estate.
“There is much talk of an imminent house price crash caused by higher interest rates dictating what households and investors can afford to pay on their monthly mortgage payments, and for new transactions. However, this house price crash story does not show up in the data yet because of the time lag of conveyancing. This month’s data reflects decisions made typically up to six months ago.
“As for the future, when it’s easy to buy, prices go up; when it’s difficult, price growth slows down. When it’s difficult to buy, and lots of people need to sell, house prices go down. The impact of circa 2 million people on variable rate or standard rate mortgages is likely to mean house-price growth slows. However, the shortage of quality, affordable housing supply protects residential property owners to some extent.
“There is a challenge and opportunity for professional investors to step in and re-capitalise the market, upgrade the quality and energy performance of existing housing, and benefiting the people and their communities who still need a place to call home.”
Conor Murphy, CEO and founder, Smartr365:
“Today’s data reinforces why the property market is famed for its resilience. Despite a busy and complicated period for the mortgage market and economy, activity remains reassuringly consistent. The recent stamp duty tax cuts will also certainly help to spur activity despite economic strains elsewhere.
“The mortgage industry must fully commit to digitisation if it is to ride this uncertain period as smoothly as possible. Making the homebuying process as swift and stress-free as possible will not only ensure homebuyers can secure their desired property, at current rates, but also cut inefficiencies and reduce workloads during a busy time.”
