30 August 2024
If you are covering the Bank of England Money and Credit statistics or the HMRC property transaction data, please see the following comment from Charlotte Nixon, mortgage expert at Quilter:
"The latest data on UK mortgage borrowing and property transactions offers an interesting snapshot of the current state of the housing market, which looks to be in recovery mode after a turbulent few years. In July, net borrowing of mortgage debt increased to £2.8 billion, marking the highest level since late 2022. This rise points to a resilient demand for property, even as the market faces broader economic uncertainties from high interest rates. It's clear that many buyers are seizing opportunities, likely driven by a mix of stabilising market conditions and the anticipation of potential shifts in interest rates. The proliferation of 4% mortgage deals also helps boost demand.
"Mortgage approvals for house purchases also climbed to 62,000 in July, the highest figure since September 2022 reflecting a growing confidence among prospective buyers, suggesting that more people are willing to enter the market despite ongoing economic pressures.
"The provisional figures on UK residential transactions provide further context to these trends. The seasonally adjusted estimate shows a slight dip in residential transactions for the second consecutive month, down less than 1% from June. This modest decrease aligns with the typical mid-summer slowdown, as many take a break from house hunting during the holiday season.
"Interestingly, the non-seasonally adjusted data tells a different story, with residential transactions rising by 7% in July compared to the previous month. This increase suggests that, despite seasonal trends, the underlying demand for property remains robust. Additionally, non-residential transactions saw solid growth, with both seasonally and non-seasonally adjusted figures up in July, indicating a broader recovery in the property market.
"Overall, while the summer months have introduced some expected slowdowns, the market's underlying strength is evident in the continued rise in mortgage borrowing and transaction volumes. As we look ahead, much will depend on how interest rates evolve and whether they will continue to support this cautious optimism. The ongoing demand for new mortgages and the increase in property transactions suggest that many people are seeing opportunity in the current market, positioning the housing sector for a potentially stronger finish to the year."
