Figures released this morning show that the provisional non-seasonally adjusted estimate of UK residential transactions in October 2022 was 110,850, 29% higher than October 2021 and 3% lower than September 2022 - when seasonally adjusted this figure becomes 108,480, 38% higher than October 2021 and 2% higher than September 2022.
Danny Belton, Head of Lender Relationships, Legal & General Mortgage Club comments: “Today’s findings confirm that the mortgage market continues to sail relatively steadily through choppy waters. Demand and activity both remain relatively high despite economic stresses, while Moneyfacts data also shows that interest rates dropped across the board last week, particularly for three-year fixes. This should go some way to encourage buyers, as will the recommitment to stamp duty tax cuts in the Autumn Budget last week.
“Elsewhere, lenders remain very keen to write new business. Advisers are the crucial connecting piece, matching borrowers with lenders to ensure as many people can achieve their dream of homeownership as possible.
“We have shown time and time again that we can weather the largest economic storms – I don’t expect this one to be any different.”
Vikki Jefferies, Proposition Director at PRIMIS, comments: “Despite recent property transaction data reflecting a relative cooling in the property market as inflation and higher interest rates bite, it is reassuring that the figures continue to stand well above pre-pandemic levels, highlighting the overall resiliency of the market.
“Given that, despite wider economic uncertainty, there is still demand in certain segments for properties, it is crucial that buyers can access expert advice to help them make the best financial decision for them. As part of a mortgage network, brokers can take advantage of professional support and a broad product panel in order to maximise their offering to these customers as they navigate this challenging period.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "Transactions are the key barometer of property market health – more significant than volatile house prices. These numbers demonstrate clearly a determination of some to take advantage of existing mortgage offers although they do reflect activity in the previous three or four months at least.
"In our offices, we are still seeing some new business slowly emerging, despite taking a severe hit from the rise in mortgage rates and cost of living. Looking forward we expect transaction numbers to decrease slowly as more buyers become accustomed to the new norm."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "Transaction numbers are holding up as buyers with good mortgage offers are keen to complete before they expire.
"There is good news for borrowers as Swap rates continue their decline, resulting in several lenders repricing their fixed-rate mortgages. We now have five-year fixes starting with a 4, rather than a 6, and would expect them to go below 4 per cent by the spring as the cost of funds falls, servicing pressure subsides and lenders attempt to originate new business.
"For some borrowers, a base-rate tracker with no early repayment charges may be a better alternative until fixed-rate pricing comes down further."
Richard Pike, Phoebus Software’s chief sales and marketing officer, says: “The non-seasonally adjusted figures for residential transactions although higher than in October ’21 is starting to show the first signs of the market slowing down. Not that this is unexpected. With all the pressures from inflation and the consistent increases to Bank of England the base rate. The fact that mortgage rates have actually come down recently is something that appears to have escaped the notice of the mainstream press. This means that while the perception is that ‘interest rates’ are rising confidence is likely to be affected negatively, which may slow the market further.
“With inflation eroding any increase in real wages the question for lenders will be one of long-term affordability and the likelihood of an increase in the number of mortgages going into default. Using all the tools at their disposal will be key. Having the right technology in place at this point will ensure that lender personnel are there at the front end to aid vulnerable borrowers. This is especially important now that the industry is being held accountable by the FCA’s Consumer Duty principles.”
