The property market has experienced a significant slowdown in sales, with a 40% drop in the worst hit areas, as interest rates continue to climb, according to a new study by digital upfront property pack provider Moverly.
The research reveals that the average number of monthly transactions has dipped by a quarter since the Bank of England first raised interest rates in December 2021.
Moverly’s analysis shows that since the interest rate hike, the average number of homes sold each month has fallen from 96,732 to 72,785.
This translates to a 24.8% decline in sales, with a monthly reduction of 23,946 homes sold across the UK property market.
The South East region has suffered the most, with a 30.2% drop in average monthly home sales. Other regions experiencing severe declines include the South West (-29.9%), East of England (-29.8%), London (-26.8%), and the East Midlands (-25.6%). Scotland, on the other hand, has seen the smallest reduction with a 10.6% decrease.
At the local authority level, Mid Suffolk has experienced the most significant drop in market activity, with a 40.1%
reduction in average monthly transactions since December 2021. Other areas facing substantial declines include Uttlesford (-39.8%), West Oxfordshire (-39.7%), Maldon (-39.6%), Torridge (-39.2%), Harborough (-38.8%), Havering (-37.9%), Hambleton (-37.5%), Maidstone (-37.4%), and Test Valley (-37.1%).
Interestingly, two areas in the UK market have managed to avoid a decrease in transactions since interest rates began to rise. Aberdeen (+2.4%) and Clackmannanshire (+1%) have both seen an increase in the average number of homes sold per month.
Moverly co-founder Ed Molyneux commented on the findings, stating that the market has undoubtedly cooled since interest rates started to increase, resulting in a significant reduction in buyer activity across nearly every region of the market.
He said: “There’s no doubt that the market has started to cool since interest rates began to increase and we’ve seen a considerable reduction in buyer activity across almost every area of the UK market.
“However, it’s rather telling that the most inflated regions of the property market have been worst affected, while Scotland has seen a far more measured reduction.
“This is down to the fact that buyers are contractually obliged to follow through with a property purchase far earlier in the transaction timeline north of the Scottish border. So the increasing cost of borrowing hasn’t caused the same level of market instability as it has in the likes of the South East, where buyers have struggled to secure a mortgage as rates have climbed.”
