HMRC property transactions data (January) published this morning show that transactions in January were down on those from December. But what’s the view out there on the ground, of what’s really going on in the property market? Mortgage experts and estate agents have been sharing their views with IFA Magazine.
Charlie Lamdin, property expert at Moving Home With Charlie: “It’s no surprise transaction levels continued to edge down in January as the fallout from the mini-Budget feeds through. However, it’s not a lack of demand that’s the problem on the transactions front, as there is still plenty of interest and desire for property. It’s a lack of available finance to pay last year’s prices, which is what sellers are holding out for. It’s this disconnect between what sellers want to achieve and what buyers are able, or willing to pay, which is limiting transactions. Looking forward, everyone is underestimating how many downward pressures there are on house prices, and how long they will remain in place. Even if there is the occasional month of ‘stabilisation’, we are at the beginning of a long downward trend in average house prices. Prices will not bottom out until 2024 at the earliest.”
Katy Eatenton, mortgage and protection specialist at St. Albans-based Lifetime Wealth Management: “Transactions in January were down on December as expected due to the mini-Budget and this trend looks set to continue for some time yet as the ripple effect of the Trussonomics era continues. However, there is still demand out there and transactions are continuing to take place, just at a lower level compared to this time last year.”
John Phillips, national operations director at Just Mortgages said: “these transaction figures show us that the housing market is continuing to defy the critics and doom-mongers.
“Significant pressure on household budgets from highinflation, rising mortgage rates and cost of living increases have failed to stall the housing market and transactions have remained robust. Underpinning this are house prices that have refused to collapse despite seemingly constant predictions across the media that they will do so and in reality, average UK house prices increased by 9.8% in the 12 months to December 2022.
“2023 is going to be a pivotal year for mortgage brokers with over 1 million people coming off fixed rates in 2023 and so now is the time for brokers to show their worth and manage clients’ expectations about potential payment shocks and ensure they are on the best possible deal.
“The greatest threat for mortgage borrowers in 2023 is apathy and meekly accepting a lender’s transfer rate without contacting a broker who can shop around to ensure they are on the best available deal.”
Nick Harris, co-founder at Wokingham-based Quarters Residential Estate Agents: “These figures are clearly starting to show the mini-Budget blip, as many buyers went into hibernation at the tail end of last year amid all the economic uncertainty. Activity was far busier than expected in January itself, however. This may explain why prices stayed flat rather than fell last month. After a quiet first half of the month, once the schools returned buyers and sellers alike were back in touch and we started to see some pre-pandemic seasonality return to the market. At the moment, discretionary buyers are staying at home but those with a compelling reason to move are active, albeit often with revised budgets given affordability due to higher rates and inflation. Given the current level of buyer activity, we expect prices to hold and perhaps even increase marginally throughout the year.”
Simon Webb, managing director of capital markets and finance at LiveMore, said: “There has been a significant drop in the number of non-seasonally adjusted housing transactions in January falling by 27% on the previous month to 77,390. This is the lowest since June 2020 when transaction numbers stood at 67,430 but that was when the UK was just coming out of the first Covid pandemic lockdown.
“With higher mortgage rates than last year and the cost of living bearing down, buying houses will not be at the forefront of people’s minds. With so much economic uncertainty potential home movers will decide to stay put.”
Sofia Jones, Managing Director at London-based independent mortgage broker, Penny House: “Though transaction levels continued to drop last month, this was baked in given the impact of the mini-Budget. Looking forward, I think we will see less of a property crash than a correction. With inflation edging down more than expected, we’re likely now near the top of the current base rate increase cycle. Once inflation is back to target, we may even see the Bank of England cut rates to stimulate the economy, which will support house prices and reignite demand and therefore transactions. The start of 2023 has been very busy for estate agents and mortgage advisers, and there’s still a lot of competition for property. Given the lack of supply, prices are unlikely to fall as much as we felt was likely back in October.”
David Conway, director of Woodford Green-based mortgage broker, Clayhall Financial Services: “Transaction levels may be down once again but mortgage rates are also on a downward spiral, which will eventually stimulate activity and see transaction levels pick up again. With affordabilty and lending calculations expected to improve, unemployment now predicted by the Bank of England to not rise as much as expected and inflation slowly getting back under control, 2023 should be a year of recovery not carnage. The projected house price drops should be nothing but a blip.”
Lewis Shaw, founder of Teesside-based mortgage broker, Riverside Mortgages: “Because of the lag in reporting, January’s data will relate to sales mainly agreed in August and September so it makes sense that they’d be down due to the disastrous mini-Budget and the consequences that flowed from it. Thankfully the property market does seem to have recovered, albeit with lower transaction levels. We’re expecting 2023 to be much like 2019, namely normal. Yes we’re not out of the woods yet but we’ve just got to get on with things.”
Clare Beardmore, Director, Legal & General Mortgage Club comments: “Although recent activity has not been at the sky-high level we have become accustomed to in the past three years, there is certainly no reason to panic. The UK housing market is famed for its resilience. The pace of lenders beginning to compete on pricing is encouraging buyers to press ahead. Product choice is also improving, with Moneyfacts reporting that available products surpassed 4,000 for the first time since August (almost double what it was at the end of October following the ‘mini Budget’ fallout).[1] As ever, consulting a mortgage adviser is strongly advised – not only do they offer comprehensive, holistic advice based on your individual circumstances, but also often access to exclusive products not available on comparison websites.”
Dean Esnard, director at London-based Magni Finance: “Residential property transaction levels were down in January compared to December and that trend looks set to continue given the property market ground to a halt after the mini-Budget. That said, though transaction levels are currently far below what we are used to, there is growing optimism in the air. Lenders’ rates have been coming down almost as quickly as they increased so it feels like the worst is over. These rates will keep the property market afloat and, with pent-up demand, I wouldn’t be surprised if house prices started to increase again at some point in 2023.”
Sharon Hewitt, MD at Beaconsfield-based relocation company, Chiltern Relocation: “Transaction levels, like prices, may be nudging down since the mini-Budget of last year but we are not witnessing the sharp slowdown many predicted. On the contrary, we have received more enquiries at the start of the year than last year and, speaking to estate agents daily, they happily report a strong start to the year with higher viewings levels than they expected. Our enquiries are from downsizers, clients relocating for job moves and clients moving out of London due to working from home. Rumours of the property market collapsing 20% are so far unfounded.”
Zaid Patel, director at London-based estate agents, Highcastle Estates: “Though this data shows what many expected, namely that transactions in January were lower than December, January itself was an interesting month and surprisingly busy. The first week was fairly quiet then all of a sudden plenty of offers came in and those offers were being accepted. They were all accepted around 5%-10% below the asking price. Sellers seem to have accepted that they no longer hold all the cards and this could help stimulate the property market.”
