Following the HMRC property transactions data for April published this morning, mortgage brokers and advisers have shared their thoughts with IFA Magazine.
Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco: “It’s no surprise that transaction levels are down significantly compared to a year ago following the mini-Budget. In recent months, we have seen the market begin to awaken from its prolonged slumber, with buyers returning and getting used to the new mortgage rate environment. That, of course, was before the latest inflation figures caused SWAP rates and therefore mortgage rates to start to increase again. This will undoubtedly have an effect on buyer affordability, mortgage choice, and therefore transaction levels going forward. With many hoping the second quarter would be the start of a new normal market, this now looks like it will be pushed back to the third quarter. If the Bank of England panics and puts rates up much further, this could have a profound effect on the housing market.”
Craig Fish, Managing Director at London-based mortgage broker Lodestone: “So much has changed between this year and last, with the mini-Budget the major cause. We were witnessing more normal levels of residential property transactions through April and May, but with the current turmoil that we are seeing there could be some stagnation moving forward. We have already had some clients tell us that their property plans are on hold until things settle down. Further rate rises could continue to dampen property transactions, but the hope is that as inflation drops, conditions will improve and we could see a strong end to 2023, which should continue into 2024.”
Ross McMillan, owner at Glasgow-based Blue Fish Mortgage Solutions: “Thanks to the mini-Budget, transaction levels in April were much lower than the same month last year. But over the past two months we have seen a return to a more normal level of transactions. Based on client mortgage offers already issued, June is shaping up to be similarly consistent and relatively positive. However, the volatility with lender behaviour over the past week or so alongside uncertainty and instability around interest rates may mean that the second half of 2023 contains a fair degree of transactional hesitation as buyers await clear and sustained indication that interest rates may finally have peaked and they can move forward with any plans with greater confidence.”
Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages: “That was then and this is now.The current mortgage market volatility we have that was sparked by the inflation data could restrain property transactions moving forward, with rising rates potentially deterring buyers. Further limits on transaction levels could occur if the Base Rate heads towards 5%, potentially inducing a property market slowdown. Projecting 2023’s trends is difficult, but unless there is some substantial positive news, escalating rates could prompt a reduction in transactions during the rest of 2023.”
Simon Webb, managing director of capital markets and finance at LiveMore, said: “Property transactions continue to fall following a month-on-month rise in March primarily due to more working days compared to February and April.
“The slowdown is likely to continue as uncertainty in the economy along with the high cost of living and rising mortgage rates will put some people off moving home. Until inflation comes down to more palatable levels and Bank base rate reduces, we expect 2023 to deliver a subdued housing market.”
