House sales fall by 16 per cent amid increase in mortgage rates – as industry looks at shoots of recovery
The number of house sales fell by 16 per cent in August compared with the same month a year earlier, according to provisional HM Revenue and Customs (HMRC) figures.
An estimated 87,010 home sales took place across the UK last month, which was 16 per cent lower than in August 2022 but 1% higher than July 2023.
It was the weakest August for house sales since 2020, when the market was dealing with the impacts of the coronavirus pandemic.
Mortgage rates have jumped as the Bank of England base rate has increased, although there have been recent signs of fixed mortgage rates easing back amid expectations over inflation.
The Bank of England uses base rate increases to curb inflation, but last week it left the rate unchanged.
Figures from financial information website Moneyfacts show the average five-year fixed-rate mortgage on the market dipped below 6% for the first time since July.
On Friday, the average was 5.98%, down from 5.99% on Thursday, according to Moneyfacts.
Alex Lyle, director of London-based estate agency Antony Roberts, said: “The hold in base rate may give hope that there’s longer-term stability on the way with regards to mortgage pricing, which in turn should improve the confidence of those anxious about committing to a purchase.”
Nicky Stevenson, managing director at estate agent group Fine & Country, said: “Affordability pressures means sales are understandably lower than last year, though last week’s base rate freeze has injected another dose of confidence in the property market.
“The suggestion that we may have nearly reached the peak in interest rates is encouraging more people to begin or resume their house search.
“This, combined with the traditional seasonal spike in demand, is helping to drive increased activity this autumn.”
Iain McKenzie, CEO of The Guild of Property Professionals, said: “Another uplift in property sales is a positive sign that the industry is recovering after a slow first half to the year.
“Estate agents have been enticing more sellers onto the market to give more choice to buyers when it comes to finding the right property.
“The annual picture still shows a significant drop off in sales at 16 per cent, but nothing different to what we were forecasting at the start of the year. If anything, our predictions of an overall fall of 20% for 2023 may even be revised thanks to the consecutive months of increases we have seen.
Meanwhile, Nick Leeming, chairman of London-based Jackson-Stops, said: “At a topline view, residential transactions have continued to rise modestly over the summer months, showing signs of a market that has been quietly boosted by a period of relative stability and resilience for sellers.
Press Association – Vicky Shaw