UK house transactions came in at 108,480 in October, up 2% on the month before, according to HMRC
UK house transactions came in at 108,480 in October, up 2% on the month before, according to HMRC, with analysts pointing out that these steady figures do not reflect recent market chaos.
The customs body says its provisional seasonally adjusted estimate for British residents does not reflect ‘recent increases in mortgage rates’ as the data captures transactions in October that were largely agreed ‘weeks or months’ before.
The data’s publication comes after the then chancellor Kwasi Kwarteng’s tax-cutting mini-budget in September, which roiled international debt markets, and was largely reversed by current chancellor Jeremy Hunt the following month.
Riverside Mortgages founder Lewis Shaw says: These figures lag behind economic reality. On the front line, it’s now a very different story. The phones have stopped ringing, buyers are holding off, and with the World Cup and Christmas upon us, most people have decided to sit tight and wait until next year.
That said, I still think the doom-mongers will be proved wrong and that a reduction of 10% to 15% in asking prices merely takes us back to pre-Covid levels and as long as you’re able to negotiate a price reduction along the chain, I’d say most people should get on with it as it becomes a zero-sum game, he said.
However, Hargreaves Lansdown senior personal finance analyst Sarah Coles adds: We know buyer demand continued to fall, and that in the aftermath of the mini-budget in September and October, it fell through the floor.
The Royal Institution of Chartered Surveyors Residential Market Report showed house price growth ground to a halt, sales plummeted, and estate agents weren’t confident they would pick up any time soon, she said.
Buyers faced the horror of mortgage rates spiking overnight, and while the average two-year fix has since come down to 6.21%, according to Moneyfacts, it’s still a different world for buyers, she said.
Meanwhile, they have the spectre of falling house prices to consider. The Office for Budget Responsibility is more optimistic about the coming recession than the Bank of England, but still expects house prices to fall 9% between now and autumn 2024, she said.
She said: It means buyers face the prospect of spending more than they can afford on a property that will get less and less valuable over the next two years. Unless they desperately need to move right now, it’s not a tempting prospect.
