MailOnline - HMRC property transaction data

The current mortgage rates are the new normal although the current market does provide opportunities for portfolio buyers to acquire distressed stock in bulk.

It's difficult to read much into a 1% increase in March. This would have been for mortgages that were approved probably between November and January. Overall transaction levels are down this year by almost a fifth and we'll need to see if there's any Spring bounce.

We've seen increased confidence in the market recently, with business levels increasing steadily throughout the year. Remortgage business has been consistent throughout but we're now seeing more purchase applications again. The desire to move to the right property is once again the driving factor, with buyers accepting rates are where they are. We expect this to continue through spring and into summer. Whilst business levels may not reach the dizzy heights of the last couple of years, there's still plenty of activity out there.

Transaction levels should steadily pick up over the year despite the economic uncertainty. Mortgage rates are where they are and will not return to pre-Covid levels, that's for sure. Once inflation starts to dip, lenders will be more lenient in their affordability assessments.

We're now in a world where sanity has prevailed and mortgage holders are more accepting of yet another 'new normal' where rates are higher. For sure, payment shock is still a very real threat to households but we can't escape the fact that people need homes to live in and will need to pay what it costs to keep doing so.

Residential property hunters have been out in force since early Jan 2023 - the results of this increase in activity won't be seen in HMRC data until the legal completions take place. We expect to see a considerable uptick from data we are analysing across our systems. With the inflation rate still being in double-figures the May 11th Bank of England base rate decision is likely to see an increase by at least .25%, potentially .50% - the knock-on effect of this to the all-important fixed rate mortgage market will be to slow the decreases we have seen in recent weeks, with a longer-term effect being lower rates if the swap rates indicate that.

The ill-fated mini-Budget crashed through the property market nationwide and undoubtedly brought it to a screeching halt for the last quarter of 2022. The recorded sales, or lack thereof, that related to that period are now already largely accounted for and so it's no surprise that registered transactions are showing an increase compared to the data from previous months.
There remains significant divergence in activity and opinion across local areas but, in the main, it does seem that buyers and sellers have adapted to the new norm and the higher interest rates that now accompany this.

The Scottish market is certainly showing signs of warming up and particularly in the usual hotspots around Glasgow and Edinburgh. Now that we are well into the traditionally busy and critical spring/summer period - despite the fairly dismal weather - there are now clear signs of a thawing out of the Truss-induced market freeze of last year and a more positive outlook for the months ahead.