30 November 2023
If you are covering the latest UK monthly property transactions data, please see the following comment from Karen Noye, mortgage expert at Quilter:
“The UK property market remains stuck in a deep freeze as weak demand caused by higher interest rates sees UK provisional seasonally adjusted residential transactions fall a whopping 21% compared to October 2022, and 3% lower than September 2023.
“Though mortgage rates are showing signs of stabilising, they are considerably higher than in previous years and this is putting a real dampener on people’s enthusiasm for moving home or taking their first step onto the property ladder. This stall in transactions shows people are still stuck in ‘wait and see’ mode, likely holding out in the hopes of a dip in house prices and lower mortgage costs.
“The summer months were remarkably subdued, and we can expect the same as we head further into the winter months which could be cause for concern for house prices. Though inflation continues to head in the right direction, the Bank of England is expected to hold rates higher for longer. House prices have remained resilient thus far, buoyed by the impacts of limited stock and high rental costs, but if interest rates remain high then more people may be forced to list their properties and we could see a surge in stock at a time of limited demand.
“As we look ahead to 2024, should the Bank of England begin to feel confident enough to start reducing interest rates then we may also see confidence return to the market. Yesterday’s money and credit statistics from the BoE revealed a small uptick in the number of mortgage approvals, showing early signs that people might be returning to the property market. However, should the number of property deals fall further in the coming months then prices could fall with them.”
