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Residential property transactions May 23

ended 31. May 2023

At 09:30 this morning, HMRC is publishing the latest completed property transactions data. This story gets a fair bit of pick-up in the media so some quick Qs:

  • Following the mini-Budget, completed transactions in the first 2-3 months of the year were muted, but have more people been moving into their homes in April and May in your experience? 
  • What impact, if any, could the current mortgage market turmoil have on transactions in the months ahead, as rates are on the up again?
  • Also, if Bank Rate rises to 5.5%, which some are predicting, what impact will this have on the property market?
  • All in all, how do you expect activity levels to be during the rest of 2023?

4 responses from the Newspage community

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Editor
Craig Fish
Director at Lodestone Mortgages
So much has changed between this year and last, with the mini-Budget the major cause. We were witnessing more normal levels of residential property transactions through April and May, but with the current turmoil that we are seeing there could be some stagnation moving forward. We have already had some clients tell us that their property plans are on hold until things settle down. Further rate rises could continue to dampen property transactions, but the hope is that as inflation drops, conditions will improve and we could see a strong end to 2023, which should continue into 2024.
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Andrew Montlake
Managing Director at Coreco
It's no surprise that transaction levels are down significantly compared to a year ago following the mini-Budget. In recent months, we have seen the market begin to awaken from its prolonged slumber, with buyers returning and getting used to the new mortgage rate environment. That, of course, was before the latest inflation figures caused SWAP rates and therefore mortgage rates to start to increase again. This will undoubtedly have an effect on buyer affordability, mortgage choice, and therefore transaction levels going forward. With many hoping the second quarter would be the start of a new normal market, this now looks like it will be pushed back to the third quarter. If the Bank of England panics and puts rates up much further, this could have a profound effect on the housing market.
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Riz Malik
Independent Financial Adviser at R3 Wealth
That was then and this is now. The current mortgage market volatility we have that was sparked by the inflation data could restrain property transactions moving forward, with rising rates potentially deterring buyers. Further limits on transaction levels could occur if the Base Rate heads towards 5%, potentially inducing a property market slowdown. Projecting 2023's trends is difficult, but unless there is some substantial positive news, escalating rates could prompt a reduction in transactions during the rest of 2023.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
Thanks to the mini-Budget, transaction levels in April were much lower than the same month last year. But over the past two months we have seen a return to a more normal level of transactions. Based on client mortgage offers already issued, June is shaping up to be similarly consistent and relatively positive. However, the volatility with lender behaviour over the past week or so alongside uncertainty and instability around interest rates may mean that the second half of 2023 contains a fair degree of transactional hesitation as buyers await clear and sustained indication that interest rates may finally have peaked and they can move forward with any plans with greater confidence.