21 March 2023
If you are covering the UK monthly property transaction data, please see the following comment Karen Noye, mortgage expert at Quilter:
"The provisional seasonally adjusted estimate of the number of UK residential transactions in February 2023 indicates a significant drop of 18% compared to the same month last year and a further decline of 4% from the previous month. This data suggests that the current economic conditions, including the high cost of living, rising interest rates, and unaffordable mortgages, are having a significant impact on the housing market.
"Lower residential transactions can have a cascading effect on the overall economy, as the housing market plays a crucial role in generating economic activity, such as construction and home improvement. Moreover, the slowdown in the housing market can also impact the household sector, as it can reduce consumer confidence and affect the wealth of homeowners.
"For the time being, the lack of transactions in the market will have a material impact on house prices, pushing them downwards as sellers compete for buyers, reversing how the market has operated over the last few years.
"For those eyeing up a property purchase, the mortgage market does look set to be relatively static over the coming weeks and months. House prices may continue to suffer, but due to issues with Credit Suisse, it is not so clear-cut that the Bank of England will further raise interest rates on Thursday and wait to see whether any further dominos fall after the investment bank was bought by UBS.
"Unless there are some substantial unexpected further shocks, mortgage rates are expected to continue to fall throughout the year. Fixed-rate mortgages are also likely to keep falling even when the Bank of England does raise interest rates, particularly if swap rates are maintained and competition between lenders vying for business continues to rage.
"For those still opting to move house, it may be worth fixing for two years to minimise the amount of time spent fixed on an inflated rate and then make the most of significantly lower predicted rates in 2025. For those happier to take more of a risk it might be worth opting for a tracker. Seeking advice on your specific circumstances is key though."
