The recent data from HM Revenue & Customs reveals an increase in property transactions across the UK in September, indicating a market boost despite economic challenges. Residential sales rose by 9% year-over-year to an estimated 91,820, slightly up from August’s figures. Commercial property sales also saw a 5% rise, with 10,250 transactions, reflecting growing investor confidence in this sector.
Andrew Lloyd of Search Acumen views the ongoing increase in transactions as a sign of recovery in both the residential and commercial markets. He attributes this resilience partly to the stability provided by recent tax and policy clarity from the government, reducing uncertainty and setting a foundation for the coming years.
Mortgage dynamics are also a contributing factor. Mark Harris of SPF Private Clients highlights the impact of lower mortgage rates, which have encouraged more buyers to enter the market. With the possibility of another interest rate cut bringing the base rate down to 4.75%, buyer confidence could increase further. However, he notes that swap rate fluctuations are causing some lenders to adjust rates, leading to varied pricing across the mortgage market.
Industry comments:
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “Lower mortgage rates have boosted activity in the market. With one interest rate cut behind us and hopefully another coming next week, bringing base rate down to 4.75 per cent, buyers will be more confident about committing to a property purchase.
“However, Swap market volatility continues, with five-year Swaps edging up over 4 per cent in reaction to the Budget. Some lenders are repricing upwards while others hold their ground for now at least, in a bid to attract new business.
“Borrowers should plan ahead and seek advice from a whole-of-market broker to find the best mortgage for their circumstances.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Completed sales are a better gauge of market strength than more changeable house prices, not least because they include cash as well as mortgaged transactions.
“Although reflecting activity from a few months ago, the figures do show buyers and sellers were not fazed by the economic and political uncertainty prevailing at that time, which bodes well.
“We do not believe the Budget will have a significant impact although properties which investors decide not to purchase due to higher stamp duty could be snapped up by first-time buyers as they also look to take advantage before they have to pay more stamp duty after the spring.”
Gareth Lewis, managing director of specialist lender MT Finance, says: “It is good to see a small increase in transactions in September. The small increase on the previous month may be partly down to the fact that August was relatively buoyant and busier than usual as people got their holidays out of the way early.
“The housing market is moving in the right direction but we will wait to se what happens in response to the Budget and whether some purchases fall by the wayside as a result of the surprise increase in stamp duty on buy-to-let and second homes.
“If Swaps don’t soften in coming days, mortgage rates will start to edge up as the market reprices.
“While we appreciate there is a financial hole to plug, the government does need property transactions as they are good driver of growth for the economy.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “With the Budget not as dramatic as feared from a property perspective, the ‘wait and see’ approach we have seen from some buyers, who have been more cautious than usual given the economic backdrop, will hopefully now ease.
“That uncertainty has resulted in an increase in properties coming back on the market after fall-throughs. These fall-throughs are often due to buyer nervousness, which in many cases is unrelated to the property itself and rather a reflection of economic uncertainty and tightening financial conditions.
“For now, demand remains and most properties are successfully re-agreed and sold after returning to the market. Demand for prime London locations is historically resilient; buyers may pause to reassess financial implications, but high-demand areas are likely to retain interest.”