This year’s spring selling season has begun on a positive note with a slight uptick in the number of property transactions, new data from HM Land Registry (HMLR) has revealed.
Specifically, the number of residential UK property transactions – seasonally adjusted –increased by 1% in March 2023 compared with February 2023. The non-seasonally adjusted figures reveal a 26% increase in transactions in the same period, such is the nature of the pipeline.
This comes as property data and insight specialist TwentyCi recently revealed Q1 2023 saw 269,000 residential sales, with seven in 10 properties listed in Q1 now having sold despite prices remaining 24% above pre-pandemic levels.
While new instructions, sales agreed, and exchanges are all down compared with pre-pandemic levels, TwentyCi said this disguises a significant injection of new supply into the market in March. Overall, they said it gives the impression of a “remarkably robust” market – not one in free fall, as they suggest some commentators predicted.
“It is positive to see an uptick in transactions from February to March kickstarting a strong spring selling season,” said Danny Belton, Head of Lender Relationships, Legal & General Mortgage Club. He added that this is supported by a growing number of mortgage products coming to market, all of which are becoming more affordable amidst competition from lenders.
“The provisional seasonally adjusted estimate of the number of UK residential transactions in March 2023 indicates a significant drop of 19% compared to the same month last year, but a small uptick of 1% compared to the February 2023,” said Karen Noye mortgage expert at Quilter:
“Despite the current economic conditions, including the high cost of living, rising interest rates, and unaffordable mortgages, these latest figures hint at a slight steadying of the housing market.”
Noye did, however, caution that interest hikes are “yet to be put on pause”:
“If the Bank of England opts to increase them again at the MPC meeting in May, we could see a further dip in transactions as more pressure is placed on people’s finances. House prices have been slowly declining in recent months, reflecting the decreased level of demand, and should transactions remain subdued then we can expect them to fall further as sellers compete for buyers.
Mortgage rates are expected to fall throughout the year, but if inflation remains sticky and the Bank of England opts to hike rates, we could see some lenders increase their mortgage rates once more. However, competition between lenders will likely keep any rises much lower than the highs witnessed at the end of last year.”
Sarah Coles, head of personal finance, Hargreaves Lansdown, commented:
“There’s some hope to be gleaned from the fact that even in this market, spring is working some of its magic – and before the figures are seasonally adjusted, there’s a significant rise in sales. It means homeowners with well-priced properties stand a decent chance of selling. We also know that mortgage approvals for the coming months rose in February, so it could mean there’s somQbers and fewer sales, and because of the lag in the market, this is likely to mean depressed completions through the spring and into the summer.”
Andy Sommerville, Director at Search Acumen, said:
“Broadly, a steadying oQf transaction volumes will likely be a continuing theme for the next few months, with a pale imitation of the usual spring bounce creating a drag on normally higher volumes for this time of year, in which transactions have not been this low since October 2021. We may still see abnormalities further down the tracks with the end of Help to Buy, a new tax year, and a potential further interest rate rise likely to dampen the mood.”
