Following the release of the latest HMRC property transaction figures this morning, industry experts have shared their thoughts with IFA Magazine.
Carl Parker, national director at Just Mortgages, said: “Rather than causing a fright, I’m sure today’s news will be expected by many given the challenging market we find ourselves in. In previous Septembers, we may expect activity to increase after the summer break and carry through to the end of the year. However, clear concerns around affordability are still hampering enthusiasm across the market. Lenders are playing their part with rates and it’s certainly not an issue of availability of funds, it comes down to people wanting and having the confidence to move.
“While not as high as last year, we are still seeing consistent levels of buyer registrations, demonstrating there is some appetite in the market, but mainly among those who need to move rather than want to. It’s an important reminder of the essential role brokers play in educating clients in the realities of the market and what it means for each client’s individual circumstances. As brokers, we have to remain proactive in these efforts.
“It also serves to remind brokers to explore all opportunities and potential revenue streams – making sure they have the necessary support structure around them to make this a reality. In recent months, we have not only seen strong demand for our business protection licence training, we’ve just launched our next round of equity release licence workshops to support ambitious brokers in maximising every opportunity.”
Simon Webb, managing director of capital markets and finance at LiveMore, said: “The housing market has been more subdued this year than last year as the cost-of-living bites into many peoples finances. September saw the first small decrease in property transactions in four months but it is almost a fifth lower than last year.
“Yesterday’s mortgage data from the Bank of England showed a substantial drop in net lending and although mortgage rates are coming down, they are still high for many people. This background means house prices are lower than last year although there is more housing stock on estate agents books but less potential buyers coming through the doors.
“With storms and flooding affecting many homes and communities too, it is likely to be a quieter autumn for house buying and selling.”
Karl Wilkinson, CEO at Access Financial Services said: “As anticipated, September data demonstrated that the market continues to hibernate, and still feels the effects of mounting interest rates in a choppy economy. But with the progress made on inflation, maintaining stability for the rest of the year is key.
“There has been a resurgence of both buyers and sellers in the market, but there is still a little hesitance. Advisers must be ready to provide expert knowledge and advice to those looking to move or remortgage.”
Charlotte Nixon, mortgage expert at Quilter: “The UK property market remains in a deep freeze as the icy winds of higher interest rates blow demand out of the market causing UK residential transactions to be 17% lower than September 2022 and 1% lower than August 2023 when seasonally adjusted.
“The normally busy summer months for property sales have been remarkably quiet with many buyers either sitting on their hands or simply put off altogether from the housing market. This has caused transaction levels to fall off a cliff. Usually as winter draws in property sales do start to slow anyway but this level of transactions is cause for concern for house prices.
“The interest rate decision later this week will also play a role in how house prices fair in the future. Inflation remains stubbornly high and if the Bank of England opts to raise interest rates once again it will prolong the dearth of demand in the market. Many analysts believe that the Bank of England will opt to hold which at the least will give potential borrowers some level of stability and potentially coax some to market especially given how high rents are at the moment.
“If the number of property deals continue to drop prices will drop with them as transaction levels act as a bellwether for the health of the market.”
Matt Thompson, head of sales at Chestertons, says: “Following the Bank of England’s September announcement of interest rates remaining at 5.25%, buyers felt more secure to make financial decisions and resume their property search. Understandably, the majority of buyers have been particularly careful about their budget by factoring in any future rate hikes as well as the cost of living.”
Tony Hall, Head of Business Development, Saffron for Intermediaries, comments: “Falling mortgage rates and stable swap rates are helping to spark activity amidst the darkened economic backdrop. And although enquiries from new buyers are slightly down on last month, the market continues to be buoyed by a high volume of refinance activity, with UK Finance reporting that £17.5bn was spent on remortgaging in the UK in Q1 alone. The outlook for November and December therefore remains firmly positive (although of course subject to any nasty surprises).
“There is also great opportunity to boost this activity further by dispelling the myth of an imminent return to the 1-2% rates that we saw at the outset of the pandemic, and flash sale on house prices (as a response to the broader economic decline). Demand remains robust and while lenders are starting to compete on pricing, any significant changes are unlikely. We are firmly in a new, post-COVID era, and borrowers must understand that the market conditions and pricing models are very distinct from those seen in the past three years.”
