The latest transaction data reveals a 14% year-on-year decrease in the provisional non-seasonally adjusted estimate of UK residential transactions for March 2023, at 94,870.
However, compared to February 2023, transactions increased by 26%. The provisional seasonally adjusted estimate for residential transactions in March 2023 was 89,560, a 19% decline from March 2022, but a 1% increase from February 2023.
In contrast, the provisional non-seasonally adjusted estimate of UK non-residential transactions in March 2023 was 13,040, a 6% increase from March 2022 and a significant 59% increase from February 2023.
The provisional seasonally adjusted estimate for non-residential transactions in March 2023 was 10,640, a 3% increase from March 2022 and a 12% increase from February 2023.
Adam Oldfield, chief revenue officer at Phoebus Software, said: “Although we were still feeling the fallout from the mini-budget across the housing market months down the line, it appears, from the non-seasonally adjusted transaction figures which have been in the pipeline for upwards of three months, that things weren’t as bad as everyone thought.”
He added that confidence appears to be increasing despite ongoing concerns about double-digit inflation.
Oldfield stressed the importance of lenders and brokers looking at future lending holistically, with many people’s fixed-rate deals ending this year.
He said: “House purchases may well be increasing at the moment, but that is only half the story, and helping borrowers coming off fixed rates presents a huge opportunity that needs to be managed well.”
Further reaction
Conor Murphy, CEO and founder, Smartr365 and Capricorn Financial Consultancy:
“With the broader economic outlook steadily improving, I am optimistic about the performance of our sector over the spring and summer months. This is, after all, usually a busier selling period due to the favourable weather conditions and longer daylight hours.
“As activity picks up, brokers and lenders must be well prepared to support the increased demand with slick and efficient processes. Recent research has revealed that the average homebuyer spends 4.7 hours of working time verifying their identity in-person – that’s just one step in the homebuying journey. Our industry must start to lean more confidently on technology to modernise and streamline processes. Brokers must make the most of tools like digital ID verification if the industry is to reach its full potential in terms of productivity and customer satisfaction.”
John Phillips, national operations director at Just Mortgages:
“The drop in transactions from March last year was no surprise after ten consecutive interest rate rises but house prices continue to rise year on year and transactions increased by an encouraging 26% from the previous month. This is great news for borrowers who have been tightening their belts to maintain mortgage payments.
“The Consumer Prices Index including owner occupiers’ housing costs (CPIH) fell below 9% last month which bodes well for a cessation in future interest rate rises and we are seeing lenders dropping mortgage rates which will help generate new lending and offer a lifeline to those balancing a household budget.
“One of the concerns of 2023 was for the payment shock for borrowers coming off fixed rates but with competitive deals being launched daily, feedback from our brokers across the country suggests that this will be manageable for most households. Although the cost of living has risen sharply over recent years, we’re finding that people’s faith in the housing market remains high and new mortgage enquiries are strong across the country.”
Bob Singh of Uxbridge-based mortgage broker, Chess Mortgages:
“After the bird-strike mini-Budget, the aftershock immediately fed through into market sentiment and demand fell off sharply. But as the markets stabilised during the closing stages of the fourth quarter, things have gradually improved to the stage where there is an acceptance that rates are as low as can be for the time being.
“This stabilisation in the markets and rates may well be reflected in the fact transaction levels in March were up on February. The prospect that we will likely see lower rates once inflation has been tamed has given the property market further confidence. It’s still a buyers’ market and motivated sellers are agreeing sales at lower prices to exit the market. Transaction levels are increasing steadily, as sub-4% rates are available.”
Paul Neal of Derbyshire-based broker, Missing Element Mortgage Services:
“There seems to be a bit of a lull in the market at the moment, with so much economic uncertainty and inflation still frighteningly high. That being said, we have seen a slight increase in market activity during the past 12 weeks, which may reflect the uptick in transaction levels compared to February.
“However, the problem remains a shortage of stock on the market, and the fact that the stock that is out there is moving very slowly. Many people appear to be waiting for a drop in prices and interest rates but are overlooking the fact that lower interest rates will ignite demand, driving prices up again. In short, the current market is a great time to buy.”
Gary Bush, financial adviser at the Potters Bar-based MortgageShop.com:
“The went-a-bit-too-far mini-Budget slammed the brakes on the property market and led to the annual festive slowdown arriving early at the end of 2022. Fast forward to what is almost May 2023 and we have seen a remarkable comeback from property hunters, with stories of buyers in the double digits once again chasing the good property stock that comes to market.
“This may be evidenced by the marginal increase in transaction levels last month compared to February. Inflation still being higher than expected will likely see a base rate increase on May 11th of 0.25%, potentially 0.5%.”
Riz Malik, director of Southend-on-Sea-based R3 Mortgages:
“As homeowners continue to face financial challenges and lack of confidence, it is becoming increasingly difficult for the property market to bounce back. We are currently surfing an erratic wave, unclear of its final destination and how hard it is going to break. The essential actors capable of resolving the crisis work at No.10 Downing Street, but given their track record to date, it appears they’ve relocated to Sesame Street.”
Graham Cox, founder of the Bristol-based broker, SelfEmployedMortgageHub.com:
“Mortgage approvals fell off a cliff late last year, about 45% lower than the year before. So it’s unlikely completed transaction levels will improve much for a while. Overall, there’s no doubt the housing market is flat. Buyers are wary of overpaying, and there are still far too many vendors holding out for silly money. With one or two more base rate rises mooted, there’s a Mexican stand-off playing out. But as more sellers put their properties on the market over the coming months, prices will fall sharply.”
Ross McMillan, owner at Glasgow-based Blue Fish Mortgage Solutions:
“The ill-fated mini-Budget crashed through the property market nationwide and undoubtedly brought it to a screeching halt for the remainder of 2022. The recorded sales, or lack thereof, that relate to that period are only now filtering through to the registered transactions and so it’s inevitable that the numbers for March this year are significantly down on the same month in 2022.
“It’s clear that there is significant divergence in activity across local areas but, in general, it would appear that buyers and sellers have adapted to the new norm and the higher interest rates that now accompany this. The Scottish market certainly has signs of heat within it in many areas and as we are now well into the traditionally busy and critical spring/summer period, it appears that, despite the fairly dismal weather, there are definite signs of a thawing out of the Truss-induced market freeze.”
