Summer appears to have tempered property transaction volumes with a marginal month-on-month decrease for the second month in a row, falling by less than 1% from 91,220 in June 2024 to 90,630 in July 2024 according to the latest HMRC UK monthly property transactions commentary. But with the election a distant memory and a cut in the Bank of England interest rate, the return of stability to the property market appears to have had a positive impact on mover confidence.
Despite the dip, the overall upward trend in 2024 is indicative of improving home mover confidence with commentators suggesting evidence of underlying strength in the market. Just this week, a lead generation service for estate agents reported it had reached 1 million leads in 2024 a month earlier than it had done so previously.
Mortgage approval data from the Bank of England also shows a month on month increase with July 2024 (61,985) 2.3% up on June 2024 (60,611); a further increase from May numbers and 26.5% higher than June 2023 (49,015). With further rates cuts predicted later in the year there is optimism this will increase further in the coming months.
Commenting on the figures Andrew Lloyd, Managing Director at Search Acumen, said the year on year increases were in line with expectations:
“In the residential arena, the year-on-year increase in transactions aligns with our measured expectations of a gradual recovery. As we move into a traditionally slower autumn period, it’s encouraging to see this resilience starting to build. The recent fall in interest rates has undoubtedly played a role, potentially enticing more buyers off the sidelines. However, we must remain pragmatic – affordability challenges persist, and the full impact of rate cuts will take time to filter through to mortgage products and buyer confidence.
Joe Pepper, UK Chief Executive Office at PEXA, said the news was encouraging but warned that as the recovers, conveyancers must be ready to cope with the increase in demand.
“July’s rise in mortgage approvals is encouraging news for the housing market, and likely an early sign of better things to come. With a fresh UK government mandate to improve the property market, borrowers are seeing the light at the end of the tunnel and gaining confidence.”
“Having now seen the first interest rate cut from the Bank of England, we are likely to see this trend continue in August’s figures – we are already seeing major lenders slash the prices of their mortgage deals that will undoubtedly drive up the number of those looking to buy, particularly those looking to get on the property ladder for the first time. As such, we expect a flurry of mortgage activity in the coming months.”
“Although this is encouraging for the market and the UK economy more broadly, there remains an underlying concern in that the infrastructure sat behind the market is not equipped to handle this demand. Investment into the digitisation of the remortgage process is needed to speed up transaction times and free up much needed capacity for conveyancers in order to cope with such heightened activity.”
Kevin Roberts, Managing Director, Legal & General Mortgage Services, said:
“The UK property market may have seen a marginal dip in transactions in July, but the underlying strength of the market is evident. Despite a few speedbumps, the road is pointing to a stronger 2025. Capital Economics’ July Report indicates that house prices will stay flat for the rest of the year, and this will dovetail with falling mortgage rates to create a wave of new opportunities for buyers. For now, stability is enough, and the current range of products and apparent lender competition on rates and criteria is a sure sign that the market is in good health.
“The horizon definitely seems to be looking a little brighter and there’s a confidence we’ll experience a busier last few months of the year, leading to further positive transaction figures in the future. If you’re thinking about your next move, whether buying, selling, or simply remortgaging, now’s the time to consult a mortgage adviser. They are best placed to help you steer through the best options for you.”
Nathan Emerson CEO Propertymark, adds:
“It is encouraging to see the number of property transactions continue to increase overall and we expect to see a further uplift later on now that the Bank of England has started on the journey of cutting interest rates. The UK Government has an opportunity to establish a new level of confidence in the housing sector when they return from their summer recess by setting down what potential schemes may be available to first-time buyers over the coming twelve months. Propertymark is keen to learn more at the first opportunity on the expected timeframes to deliver nearly two million homes across the next parliamentary term – it is vital that pressure on current demand is eased as soon as possible.”
Describing the recent transaction uplift as “energetic,” Chris Little, Chief Revenue Officer at finova said
“Today’s data is a minor dip in what has otherwise been an energetic season. Right now, there is a lot of pent-up demand in the current property market, as buyers and sellers search for the most suitable options in a crowded market. The base rate cut will certainly stimulate activity, but we may not see an uptick in transaction volumes until later in the year. What we do know for sure is that the market is locked into a mortgage price war. Lenders are competing to fill their books before the end of 2024, and so the market is flush with opportunities. Although transactions may seem flat today, the stage is being set for a much busier property market in 2025.”
“Autumn may be around the corner, but the market temperature is heating up. As lenders prepare for 2025, technology must be at the front of any key strategic conversation. In a digital marketplace, borrowers now demand seamless services and have little interest in wrestling with outdated legacy systems. Investment into dynamic pricing engines early will give lenders a competitive edge, simplify new product launches, and elevate the experience for borrowers, savers, and brokers.”
Iain McKenzie, CEO of The Guild of Property Professionals, comments: “An increased number of transactions during July this year compared to last year, reflects the more positive outlook on the market. Inflation hoovering around target and the recent decision to cut the interest rate will all be adding to the growing momentum.
A higher interest rate environment and political uncertainty have played their part in settling demand; however, the property market continues to show resilience and consumer confidence continues to move in the direction.”
