The number of seasonally adjusted residential transactions in July 2023 was 86,510, 1% higher than June 2023, data from HMRC has revealed.
July was the second consecutive month in which there was small increase in seasonally adjusted transaction figures.
However, seasonally adjusted figures for both residential and non-residential transactions were down 16% and 6% respectively, compared with July of last year.
Non-seasonally adjusted residential transactions were also down 9% relative to June, with the equivalent non-residential figure down to 8%.
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Nicky Stevenson, managing director at Fine & Country:
“Property transactions were stable in July, rising slightly compared to June on a seasonally-adjusted basis.
“Affordability pressures caused by successive base rate rises are squeezing demand compared to last year, but the housing market is proving resilient.
“Buyers have become used to the higher-rate lending environment, and many sellers are pricing their properties accordingly. Sensibly priced properties continue to attract a lot of interest, while smaller homes in affordable locations are proving the most popular.
“A pause in base rate rises would stabilise mortgages and inject even more confidence into the property market.
“Hopefully we are soon reaching the point where the Bank of England can take a step back from interest rate hikes and let the economy recover of its own accord without needing to pull another lever.”
James Bull at JB Mortgages:
“The property market is a shadow of what it was last year.
“The fact that transactions in July 2023 were down sharply compared to July last year says all you need to know about where the market is at.
“Throughout the year, the purchase market has really slowed as the impact of higher mortgage rates has kicked in.
“Clearly, there are regional variations but the one constant is that only realistically priced properties will sell.
“The one thing supporting prices and favouring sellers, if only marginally, is the lack of supply. Many existing homeowners see this as a bad time to sell a house so there are not enough properties for sale to meet the demand.”
Imran Khan, co-founder at PropertyLoop:
“2022 feels like a decade ago compared to where the market is at now. Demand is noticeably weaker and this is feeding through into lower transaction levels.
“Transactions are still happening, as reflected in the slight uptick on June, but the market remains vulnerable.
“The dampening in demand is particularly noticeable in southern England where higher mortgage rates have deterred buyers.
“Vendors now know that realistic pricing is no longer optional but a necessity to close deals.
“The key determinants for house prices over the next 12 months will unquestionably be inflation, interest rates and the overall economic climate.
“The remortgage crunch looms larger by the day and could be the catalyst for forced sales, potentially at scale.”
Justin Moy, founder at EHF Mortgages:
“Overall, property transactions have been much lower than usual, which is unsurprising given rising interest rates, high inflation and broader economic uncertainty.
“As house prices fall, one positive is that we have seen a good level of interest from first-time buyers who are fed up with paying high rents and see now as a good time to buy.
“If they can find the deposit, they would rather put payments similar to their rent towards their mortgage.
“Whilst mortgage rates are higher, property prices are lower and for many first-time buyers now is a good time to get onto the ladder.”
Kevin Roberts, managing director at Legal & General Mortgage Services:
“Whether buying or remortgaging, the UK housing market has clearly seen a quieter period over the summer, with consumers choosing to sit tight and take a ‘wait and see’ approach.
“This contrasts against the urgency we saw earlier this year as borrowers raced to lock into new deals in a market of rising rates.
“However, we expect this pause in activity will likely be short-lived as a more stable market shapes new norms, encouraging buyers to make a move onto or up the housing ladder, and existing borrowers to remortgage as their deals expire.”
“As activity picks up, many will need ample reassurance that they are making the right choices about their mortgage, as well as those gifting to loved ones as part of the Bank of Family.
“In these challenging times nobody has a ‘crystal ball’, but advisers have a golden opportunity to add value by offering professional guidance to help their customers make informed decisions.”
Vikki Jefferies, propositions director at PRIMIS:
“Despite tough market conditions as a result of elevated inflation and the cost-of-living crisis, property transaction figures continue to sit well above the numbers we saw pre-pandemic.
“This speaks to the resilience of the market, which should see activity bounce back once inflation and interest rates return to lower levels.
“In the meantime, broader market activity is being driven by re-financing. Data from our product desk shows that product transfers and rate switching have continued to be a focal point for broker queries.
“While this is the case, brokers should ensure that borrowers are exploring all the options available to them, whether that be product transfer or remortgaging, so their customer can make the most informed decision possible when their fixed rate comes to an end.
“Training and workshops provided by mortgage networks’ can prove to be invaluable for brokers in managing customer and lender queries throughout this period.”
Karl Wilkinson, CEO at Access Financial Services:
“As anticipated, the market continues to feel the knock-on effects of mounting interest rates. But with falling inflation, and increased stability in swap rates, we should start to see signs of smoother sailing in the second half of the year.
“Advisers must focus on providing expert knowledge and support to those looking to move or remortgage especially the reported 800,000 fixed-rates loans coming to an end in the second half of this year and further 1.6 million in 2024.
“With mortgage rates now stabilising, and the turbulent end to 2022 firmly in our rear-view mirror, we are observing the green shoots of recovery with the industry reporting a resurgence of both buyer and seller interest in the market.”
