New data from HM Revenue & Customs has revealed the number of UK residential property transactions in October 2023 was 17% lower than the same month in 2022.
The provisional non-seasonally adjusted estimate of the number of UK residential transactions in October 2023 is 90,920, 17% lower than October 2022 and 2% lower than September 2023.
Looking at the same data on a seasonally adjusted basis, HMRC said that transactions in October 2023 is 82,910, 21% lower than October 2022 and 3% lower than September 2023.
Ben Waugh, Managing Director at more2life, said that “another dip” in property transactions is “likely to cause some concern”. He continued:
“However, we must keep in mind that this is a reflection of the ongoing cost of living crisis and economic uncertainty. Looking ahead, there may be some green shoots for aspiring homeowners, with interest rates stabilising and inflation slowing.
The mortgage market is reassuringly resilient, and we are seeing many homeowners – often with fixed pension incomes – considering how they can augment their retirement income. In times such as these, equity release can be a great option, with products also available to facilitate gifting younger generations who might be taking their first steps on the property ladder. For individuals deciding whether releasing equity is the right choice for their personal circumstances, it is crucial they seek independent financial advice.”
Andy Sommerville, Director at Search Acumen, the property data and insight provider, said that the figures are “indicative of the macro-economic conditions currently dictating the market”. He added:
“Despite some cause to be positive about the economic progress we have made through 2023, we haven’t turned the corner yet. The OBR recently cut its growth outlook for the UK for 2024 and 2025, the Governor of the Bank of England has reiterated that he does not see interest rates being cut for the foreseeable future and inflation remains double the Bank of England’s target rate meaning that, while we have made undoubted economic progress, people don’t feel any better off yet and may not for some time. Those macro-economic conditions, particularly the likelihood of very high borrowing costs for some time to come, mean that sustained growth may still be a way off for both the residential and commercial markets. In that context house buyers, homeowners and investors across the residential and commercial property sectors will need to continue to be discerning in their asset selection and asset management decisions, looking at locations and asset classes with particular dynamics that enable them to outperform.
Investors that succeed in a challenging market will be those that prioritise developing more intelligent data driven insights and leveraging technology to improve efficiency and decision making. The other thing that needs to happen to encourage growth is a better transaction process that facilitates more efficient and cheaper buying and selling of commercial and residential real estate. Particularly in more challenging economic conditions, protracted transactions which are slowed down by lack of data, resources or manpower can derail a perfectly viable deal. We can’t be in that position going into 2024, especially with the range of technologies we have at our fingertips.
Nathan Emerson, CEO of Propertymark commentsed:
“We are yet to see full consumer confidence resume within the UK housing market and while there are overall early hints a turning point could be on the horizon, we must remain vigilant.
Andrew Bailey, Bank of England Governor, recently suggested there will be no quick drops in base rate for the foreseeable future to help keep inflation in check. Many households continue to grapple with the ongoing cost of living crisis and only when such pressures finally ease will we start to see a healthy momentum in terms of sales volumes fully return.
Propertymark remain optimistic the entire UK housing market will steadily gain traction, but currently we remain in a phase of transition for the moment”.
