ONS Property Transactions: “The phones have stopped ringing” – reaction from, brokers, agents and developers

by | Nov 22, 2022

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Following the ONS property transactions data published this morning, the following comments from Newspage have highlighted the thoughts of estate agents, brokers and property developers.

Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco“These figures don’t factor in the chaos of the past month or two. The mini-Budget temporarily blew demand apart as mortgage rates shot up and people played it safe, but transactions and a degree of normality are starting to return. First-time buyers are still active and this key demographic is waiting in the wings ready to pounce as prices fall. The fact the mortgage market has now stabilised and that rates are not set to peak as high as we thought has brought some confidence back into the market, despite the predicted long recession that lies ahead. After two years of surreal house price growth, some froth had to come off the market and that will drive transaction levels rather than destroy them.”

Lewis Shaw, founder of Teesside-based Riverside Mortgages“These figures lag behind economic reality. On the front line, it’s now a very different story. The phones have stopped ringing, buyers are holding off, and with the World Cup and Christmas upon us, most people have decided to sit tight and wait until next year. That said, I still think the doom-mongers will be proved wrong and that a reduction of 10%-15% in asking prices merely takes us back to pre-Covid levels and as long as you’re able to negotiate a price reduction along the chain, I’d say most people should get on with it as it becomes a zero-sum game.”

Riz Malik, director of Southend-on-Sea-based R3 Mortgages“To quote Björk, the UK housing market is oh, so quiet and oh, so still. The sliver of activity we are seeing is coming from first-time buyers. With the World Cup, miserable weather and a month before everyone shuts down for Christmas, activity levels are likely to be pretty low. Over the Christmas break, many people will be reassessing their housing requirements so activity may pick up in January. A lot will depend on the strength of the jobs market in 2023 and how long it takes for inflation to come back down to more palatable levels.”

Joe Garner, managing director at London-based property developer, NewPlace“So far in the fourth quarter, demand for new build property has fallen off a cliff. Unless sellers are really motivated or have to sell, it is likely transactions will plummet as people stay put and look to ride out the storm. Until a Government-backed, UK-wide support scheme for first-time buyers is reintroduced, it is unlikely we will see any major increase in transactions. However, as interest rates stabilise and inflation is brought under control, we could see transactions recover as the great property cycle machine clicks back into gear.”

Jamie Lennox, director at Norwich-based mortgage broker, Dimora Mortgages“Since the short-lived Trussonomics era, demand has been frankly decimated. A lot of people are sitting on their hands and waiting to see how things pan out. Naturally, the run-up to Christmas will temper demand even further, all the more so with the World Cup. Many buyers live in fear of previous recessions and are extremely wary that if they buy at the wrong time, they could be left with negative equity. That said, there are a large group of first-time buyers who are hoping for house prices to drop and are waiting for their moment to take a leap onto the property ladder.”

Alex Mosley, Director of central London buying agent, Perrygate“Across the UK as a whole, it’s likely property transactions will fall due to the strength of the economic headwinds we’re facing and people battening down the hatches. In prime Central London, supply will be an issue, as discretionary owners of best-in-class property don’t want or need to sell during a recession, let alone convert weak Sterling into Dollar-linked currencies. Transactions levels could fall further as a result and off-market will continue to play an important role. Prices in prime central London may prove more resilient than family homes across Greater London during 2023.”

Kylie-Ann Gatecliffe, Director of Selby-based mortgage broker, KAG Financial“While we have seen a drop in purchase transactions over the past month or two since the now infamous mini-Budget, we still have plenty of clients looking to buy. However, with all the uncertainty they are taking much more time to make their decision on a property, as opposed to the madness of the Summer, where buyers were sometimes forced into a bidding war. While transaction levels haven’t dried up, the waters of the housing market feels calmer and this isn’t necessarily a bad thing. Conversations around affordability are key and many buyers aren’t going up to their maximum affordability and are instead leaving themselves in a more comfortable position. Leveraging yourself to the hilt with mortgage debt is no longer a thing. Properties are still selling, we just aren’t seeing the boom we saw in the summer.”

Zaid Patel, director London-based estate and lettings agents, Highcastle Estates“The property market won’t grind to a halt in 2023 as there are plenty of cash ready property investors out there and first-time buyers who are poised to purchase any properties that drop 10%-15% in value. With demand for rental properties at such an unprecedented high level in some boroughs of London — we have had 50+ viewings booked within the first 24 hours — the rental yields along with the expected capital appreciation once house prices recover means serious property investors are still active.”

Samantha Bickford, mortgage specialist at Plymouth-based Mortgages With Clarity“While, overall, we have seen a slowing in the number of property transactions, first-time buyers are still fairly active. However, the difference is most buyers are not in a hurry to buy given inflated house values and noticeably higher mortgage rates. Most conversations with clients currently end in them saying they are going to hold off until the New Year to see what’s happening in the market. This is not unusual for this time of year, but is being heavily influenced by the hope that interest rates will start to come down again and mortgages will once again become affordable. I am also seeing borrowers avoid using all of their deposit for their purchase, as they are nervous to part with their hard earned savings by putting all their money into a new purchase, leaving them without an emergency fund. Rather than take on a higher mortgage amount, they are looking for a lower value property, or holding off all together for the time being.”

Imran Hussain, director at Nottingham-based mortgage broker, Harmony Financial Services“Since Kamikwasi and Trussonomics, we have seen the mortgage market go doolally with rates changing daily. This hit confidence and transaction levels hard but now that we have a new administration things are starting to get back on track. The fourth quarter of the year tends to be quieter as the nights draw in and Christmas approaches but the one area of the market that’s still holding up is first-time buyers, who are being driven to purchase because of the astronomical level of rents. The World Cup could also water down transaction levels in the months ahead, as prospective buyers spend less time on Rightmove and more time glued to the TV.”

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