28 March 2024
If you are covering the latest UK monthly property transactions data, please see the following comment from Karen Noye, mortgage expert at Quilter:
"The housing market has been remarkably quiet in the past few months, and new data from HMRC this morning shows that this trend has continued. Though the figures revealed the second consecutive monthly increase in seasonally adjusted residential property transactions, the uplift was a mere 1%, rising from 81,930 in January 2024 to 82,940 in February 2024. This was also 6% lower than February 2023.
“Following a dip in mortgage rates at the start of the year, they have more recently risen slightly which is likely to cool the market further. This quiet period has put some downward pressure on prices, but it has not had the dramatic impact that some had predicted when mortgage rates soared. This has resulted in moving home or taking the first step onto the property ladder becoming that much harder when combined with higher mortgage rates.
“All eyes are on the Bank of England as we await its first interest rate cut. It will now have some confidence that inflation is finally coming to heel, but has a difficult balancing act ahead of it and will be reluctant to move too much too quickly so we are likely to be waiting for some time yet. This will have a knock-on effect on the housing market as many prospective buyers will likely be holding out in the hopes of lower mortgage rates. Once the Bank does begin lowering its base rate, however, it would present a more favourable borrowing landscape which could pull prospective buyers out of ‘wait and see’ mode and accelerate the housing market’s recovery.
“As announced at the Chancellor’s recent spring budget, from 6 April the higher rate of property capital gains tax (CGT) will be reduced from 28 per cent to 24 per cent which will be good news for a small section of the market. There are some hopes that this cut could incentivise more people to sell their properties, which may increase supply across the market which could increase transactions. However, how influential this will be remains to be seen, particularly given that other CGT allowances have been slashed which means the generosity of this is lessened.”
