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Monthly property transactions September 22

ended 21. September 2022

Tomorrow morning at 09:30 we're getting the latest HMRC property transactions data (basically, how many residential property transactions completed last month). With this in mind, a few Qs for you. 

  • How active is the market now compared to a month or so ago? Have transaction levels picked up after the summer lull?
  • Are you expecting  transaction levels to drop off during the latter stages of the year and through the winter? After all, we're likely to get a sharp rate hike this week and many households are struggling with the cost of living crisis already so may put transactions on hold.
  • Could transaction levels fall sharply if rates rise above 3% before Christmas?
  • Could we see transaction levels rise next year due to forced sales, or will the stress testing rules that were in place come to the rescue?

Any other thoughts, jot them down. No need to write an essay.

7 responses from the Newspage community

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Editor
Rob Peters
Principal at Simple Fast Mortgage
It's been a funny year. There wasn't a summer slowdown or August holiday lull as savvy buyers pushed ahead to secure properties and cheap rates while they could. September has seen buying activity tail off slightly in some areas of the market such as aspirational buyers or second home hunters. First-time buyers continue to lead the charge with buying being a necessity in many cases. Market forces simply aren't yet strong enough to deter them. However, a 0.75% Bank of England interest rate increase will remove mortgage affordability for some and I expect to see a slow down in the final quarter of 2022.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
All we hear in the news is the 'cost of living crisis' and that sentiment has fed through to confidence in the housing market. Homeowners can feel a recession coming and that means there is no confidence to commit to big purchases like new homes. Interest rate rises compound that sentiment and this is why I expect transaction levels to further dry up in the latter part of the year. 2023 will be slow as the economy goes through its transition. I don't expect to see forced sales as the FCA changed affordability criteria in the wake of the 2008 financial crisis.
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Mark Robinson
Managing Director at Albion Forest Mortgages
We are still finding the market incredibly busy, with absolutely no signs of slowing down at all! For now at least, people are just dealing with interest rate rises and the cost of living. Curiously, I think with the cost of living crisis, and rent increasing across the board, more people will be looking to ways to get onto the property ladder. We are seeing an increase in Joint borrower sole proprietor enquiries and parents using Equity Release products to try and get a deposit together for their kids. Ultimately people will grumble about rates being high, but most will just accept them and go ahead with their purchase anyway.
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Rob Gill
Managing Director at Altura Mortgage Finance
Our transaction levels in August were the highest of the year so far, a very unusual scenario indeed. Rocketing mortgage rates seem to have persuaded mortgage borrowers to interrupt their holidays and get on with securing a mortgage deal, whether it be for a purchase that might otherwise be out of reach or a remortgage that could help offset other rising living costs. There's no sign of this trend slowing down, especially with the Bank of England tipped to hike the base rate significantly again in September.
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Malcolm Davidson
Director at UK Moneyman
There is a lot of talk of supply and demand but unless you are working at the "coalface" such as estate agents and mortgage brokers I think you would be quite shocked to see just how extreme the mis-match is at times. As recently as last week, a client of mine was one of 30 people offering on a standard two-up two-down property valued at £140k. I think for first-time buyers the decision is still easy, if they can afford to buy they will continue to do so. For home movers, the decision is more nuanced. They are taking out a bigger mortgage most probably and a larger property means larger bills. Apply a higher rate of interest to that bigger mortgage and a higher cap to the extra energy required and often you will come up with the answer: "Shall we just stay put and wait and see what happens?". This means less supply but demand at the bottom end remains high and this is what is supporting property values, which are up 20% since Covid alone. Don't forget Help to Buy is ending soon, too, and nothing to replace it has yet been announced.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
With Truss recent announcement of a stamp duty tax cut, we’re expecting transactions to rise once it takes effect. It will reinject buyer confidence into the housing market after the nil rate band returned to £125,000 last year. With the government introducing more fundamental reforms that encourage growth in transactions and support credit-constrained households that are heavily exposed to income volatility, we’re seeing an increase in real estate activity as an effect.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
People still want to move and for all the talk of rate rises putting buyers off, the alternative is renting and that only increases when rates go up, too. Don't forget most landlords have a mortgage. September has still been very busy despite ending up with two bank holiday weekends. We may have had a bit of a lull in activity last week but things have certainly been hectic since everyone came back to work on Tuesday.