Property transactions were down a third compared to the same period last year

Property transactions were down a third compared to the same period last year.  

According to a piece featured on Today’s Conveyancer, new data published by HM Revenue & Customs has shown that the number of UK property transactions in April 2023 was just over 30% lower than the same month in 2022.  

The 60,000+ transactions seen last month were also just under 30% lower than the previous month of March 2023 on a non-seasonally adjusted basis.  

Despite this, commentators have suggested that the UK property market is proving “more resilient than anticipated” amidst the new borrowing landscape.  

Kevin Robers, the Managing Director of Legal & General Mortgage Services, says:  

“Following the slight uptick in property transactions in March, today’s data similarly suggest that buyers and sellers are steadily returning to the market. Although transaction figures no longer resemble the highs we saw during the pandemic, activity is still proving to be much more resilient than anticipated.  

After almost a decade of ultra-low interest rates, buyers are still adjusting to a new borrowing landscape. Innovative new products are helping to meet buyers’ changing needs, but they’re also adding new levels of complexity.”  

However, Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, was less optimistic:  

“March was a blip, driven by the fact it was the final month to take advantage of the Help to Buy equity loan scheme. Once the window closed, sales dropped like a stone. And this may not be the end of the bad news. When you take the blip out of the figures, April’s decline continues the miserable trend we’ve seen since the beginning of 2023. We had a shocking January, a worse February, and after a brief hiatus in March, April saw us revert to the downward path again.”  

This was before the double-hit news breaking that mortgage approvals were sliding amidst rising rates, which saw the interest rate rise to 5.5%. A quick knock-on effect is that nearly 10% of mortgages are taken off the market due to concerns surrounding the rise, and it’s not good news as there’s speculation it will rise again in the coming weeks.  

“Even with a brighter economic picture,” Says Karen Noye, a mortgage expert at Quilter, “household finances are likely to remain buffeted by the volatility that inflation and higher interest rates bring.”  

Today it was announced that 10% of mortgages had been taken off the market due to concerns about increasing interest rates. The figures indicate that approximately 800 residential and buy-to-let deals have been withdrawn, and average rates and two and five-year fixed deals have also risen.  

This comes after Nationwide building society announced that mortgage rates on new fixed deals would increase by up to 0.45 percentage points in response to higher-than-expected inflation figures.  

The Office for national statistics revealed that while Britain experienced the sharpest fall in inflation since August, with the annual rate dropping to just over 8% in April, it was not as significant of a decline as predicted.  

What does this mean for conveyancers? It’s a confusing picture as caseloads are nearing or have hit record levels.