Provisional numbers from HMLR indicate that transaction volumes fell slightly in August to under 85,000, compared to 86,500 in July, and against August 2022 represent a fall of 20%. The figures are drawn from HMLR’s Transaction Data published monthly with final numbers expected to be confirmed later this week.
The news came at the end of the week in which the Bank of England held interest rates for the first time in 14 months at 5.25%; a move welcomed by much of the home moving profession with many commentators hoping we have hit the interest rate peak.
Lenders have reacted positively, lowering mortgages rates to below 5% for the first time since June in the 75% and 60% LTV 5-year fixed mortgage brackets. The latest data mortgage tracker data from Rightmove shows the lowest rate available for a 75% and 60% LTV 5-year fixed mortgage is now 4.94%. The average 5-year fixed mortgage rate is now 5.58%, up from 4.42% a year ago and the average 2-year fixed mortgage rate is now 6.11%, up from 4.57% a year ago.
The cooling market, and a return to some seasonality in transaction trends with Summer proving to be quieter in 2023, may have also seen a small reduction in transaction times according to GetAgent.co.uk. The website monitors the time it takes to sell a home from the point a property is first listed on the market, all the way through to the sale being registered as complete with the Land Registry. Their latest research looks at the average time it has taken to sell a home over the last 6 months (January 2023 to June 2023 – latest available) and how this compares to the previous 6 months (July 2022 to December 2022).
The latest figures show that over the last six months, the average home has taken 218.9 days to sell across England and Wales; 8.1 days quicker than the average of 227 days seen across the 6 months prior.
Commenting on the figures Co-founder and CEO of GetAgent.co.uk, Colby Short suggested that home moving professionals may have “less on their plate“, positively contributing to transaction times.
“Despite a cooling housing market in which expensive mortgages and a high cost of living are denting buyer demand levels, the overall time it takes to sell has actually reduced.
Lower buyer demand usually means it takes longer to find a quality buyer, but at the same time, a quieter market means that the selling process can be completed more quickly because the professionals involved have got less on their plates.
So while the real challenge in today’s market is finding a buyer in a stronger enough position to reach completion, those that can achieve this are finding that the road to completion is far smoother than it was during the peak of the pandemic boom period.”
Anecdotally, demand remains strong and the news from the Office for National Statistics (ONS) that house price inflation has slowed will help with affordability. House price inflation in the 12 months to July 2023 was 0.6%, down from the peak a year ago of 13.8% in July 2022. Property prices decreased by 0.5% in July 2023, following a month-on-month increase of 0.7% in June 2023 meaning the provisional estimate for average UK house price was £290,000 in July 2023, £2,000 higher than 12 months ago, but £2,000 below November 2022.
