Property transactions slide 17 per cent in October as hangover from high mortgage rates drags on
The number of new homes bought in October was 17 per cent lower than the year before, as high mortgage rates during the summer led to lower activity, according to the latest figures from HMRC.
During the month, some 90,920 properties were sold, which was two per cent lower than in September.
When adjusted for seasonal factors the number stands at 82,910, 21 per cent lower than in October last year and three per cent lower than in the same period last month.
Mortgage rates surged over the summer and early spring after the central bank consistently raised interest rates in the wake of high inflation.
However, a surprise drop in inflation to 4.6 per cent, has since led high street lenders to offer cheaper mortgage deals.
Frances McDonald, director of research at Savills, said that completed transactions in October remained “relatively muted as high mortgage costs during the summer months led to lower activity levels”.
“Despite lower levels of transactions this year, activity has remained more positive than anticipated in the wake of the mini budget, as cash buyers take a larger share of the market,” said the director.
McDonald said that number is likely to recover to 1,040,000 in 2024 once mortgage rates come down more significantly and they’ll reach 1,160,000 by 2026.
Matt Thompson, head of sales at Chestertons, added: “The recent price adjustment that some of the property market has seen led to more house hunters continuing their search in October.
“The vast majority of buyers accepted that interest rates are here to stay and, after readjusting their budget or search criteria, were no longer willing to delay their property search any further.”