Property transactions increased by 1% in August, according to the latest figures released by HMRC.
The seasonally adjusted estimate stood at 87,010, 1% higher than July 2023.
However, the non-seasonally adjusted estimate of the number of residential transactions throughout the month was recorded at 95,000, 11% higher month-on-month.
August was the third consecutive month to show an increase in transactions, following a month-on-month increase of 6% and 0.3% in June and July respectively.
The non-seasonally adjusted estimate of the number of non-residential transactions was found to be 9,720, 8% higher than July, while the seasonally adjusted figure stood at 9,870.
Reaction:
Tony Hall, head of business development at Saffron for Intermediaries:
“It’s positive to see that property transactions in August have increased, especially when the summer is traditionally a slower time for the market.
“When combined with the fact that the Bank of England base rate hasn’t increased further, this may provide a much-needed boost to consumer sentiment.
“Swap rates are far less volatile now than earlier in the year, and many lenders have factored in future base rate rises. As a result, we’ve seen fixed rates being repriced downwards.
“However, we have seen a rise in gazundering – a process where a buyer lowers the offer made on a property just before the exchange of contracts.
“This is a rising concern in the industry which has resulted in some purchases falling through. This can happen when a buyer finds issues with the property during the surveying process.
“Reforms to the house buying process in England to introduce a home report, similar to the Scottish system, could be a suitable solution to this problem.”
Vikki Jefferies, proposition director at PRIMIS Mortgage Network:
“Even though the number of transactions in August were marginally higher than in July, figures remain down year-on-year, as although inflation has started to come down, it is evident that both this and higher interest rates continue to weigh on market activity.
“Affordability continues to be a particular challenge for first time buyers, with new research from Halifax showing that there were 22% fewer first-time buyers between January and August compared with the same period last year.
“Given this, the Bank of England’s decision to keep the base rate at 5.25% in September, and the resulting decrease in mortgage rates, will have been welcomed by many and should stimulate market activity in the coming months.
“Brokers should therefore ensure they are prepared for a busier Q4, both in terms of being in a position to help their customers achieve the best possible outcomes, but also in terms of being able to look after themselves.
“2023 has been a rollercoaster of a year, with brokers going above and beyond to support their clients. It is important that appropriate time is taken to relax and revitalise to avoid work related stress, and even burnout.
“Mortgage networks can help ease the burden on brokers and help them deliver a quality service to all of their clients both now, and in the longer term.”
Mark Tosetti, group partnerships director at ONP Group:
“Although we continue to feel the baked-in effects of recent mounting interest rates with seasonally adjusted transactions rising again for a third successive month, we are hopefully seeing the green shoots of recovery.
“After a welcome dip in inflation, and the markets buoyed by the MPC’s decision to pause interest rates – we are hopefully on course for smoother sailing in the second half of the year.
“Through collaboration with our partners, the focus will be on providing expert advice for those looking to move or remortgage this year, in particular the reported 340,000 fixed-rates loans coming to an end in Q4 and further 1.6 million in 2024.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
”Transactions are always a better barometer of market health than prices. Although a little dated, these numbers clearly demonstrate a determination to proceed with home moves.
“Clearly numbers are lower than this time last year but they are certainly not falling off a cliff and expectations that mortgage rates and inflation may be at or near their peak is helping to generate more activity.
“The rising cost of living, and especially mortgages, has stretched affordability but hopefully now it’s at its maximum, which is a view held by many of our buyers and sellers.”
