UK residential transactions in March 2023 totalled 89,560 which was 19 per cent lower than the same month a year ago but 1 per cent higher than February 2023, according to HMRC.
The seasonally adjusted figures also show the total of non-residential property purchases, including commercial and factory property was 10,640, three per cent higher than March 2022 and 12 per cent higher than February 2023.
Les Pick, sales director at lending specialist more2life said the slight rise in property transactions over the value of £40,000 or above in March was a sign that spring was in the air for markets.
He added: “UK residential transactions have shown their typical stability in recent months and have remained at levels similar to pre-pandemic late 2019 levels. With rates as they, are this sign of an active market highlights the ongoing strength and resilience of the housing market as homeowners continue to move and first time buyers take their first steps on the property ladder.”
“However, the fact that transactions remain lower than this time last year shows that some homeowners are still wary. When the economic climate has consumers worried, the best thing they can do is to reach out to an adviser for an independent, expert opinion on their concerns. This is particularly true of the over-55s, who are often on a fixed income and due to their spending patterns typically harder hit by inflationary increases to food, utilities and other basics.”
The property market has struggled following the pandemic and earlier this week 450 jobs were axed by home construction firm Taylor Wimpey as it looks to deliver £19m in cost savings.
Ahead of its AGM today, the London-listed firm said spring had helped in year to date sales, while severe challenges remained for first time buyers still.
Property – buy or sell
Tom Bill, head of UK residential research at Knight Frank, said the steep in property sales that followed the shock of the mini-Budget has bottomed out.
He said: “The mortgage market has stabilised and buyers increasingly accept they are in a new lending landscape after 14 years of ultra-low rates. Buoyed by savings accumulated during the pandemic, record levels of housing equity and a strong jobs market, activity has been solid but not spectacular this year at all price points. “
Bill said that the further the UK property market got away from the mini-Budget the better. “That said, homeowners will experience more financial pain as they roll off historical fixed-rate deals and UK prices should fall by a few percent this year. Properties that tick all the right boxes will hold their value but some of the pandemic froth has now disappeared.”
Tomer Aboody, director of property lender MT Finance, said:”‘Although a slight recovery in transaction numbers in March is a welcome boost for the market, if you put the numbers into context over the past decade, they are still lower than any year suggesting that the market is looking to recover after successive interest rate rises and higher cost of living.”
“With talks of the likelihood of inflation reducing, along with rates towards the end of the year, it could then be time for some government intervention with regards to stamp duty can once again, in order to inject some life into the market.”
Property market still cautious
Alex Lyle, director of Richmond estate agency Antony Roberts, says: ’Transaction numbers are proving to be fairly steady, although the average time taken from under offer to exchange of contracts is at an historically high level.
‘Everything is taking longer this year, so buyers and sellers alike must ensure they have all their paperwork in order, and a good solicitor in place, to ensure deals proceed as smoothly and successfully as possible.
’The multiple bids scenario seen so often in the first half of last year is no longer apparent. That said, new buyers are proving to be committed and decisive, with plenty of new enquiries since Easter boding well for activity in coming weeks.’
Andy Sommerville, director at Search Acumen, a property data and insight provide said that commercial property activity showed a positive incline but overall, the market continued to reflect a prolonged sentiment of caution, falling short of the transaction peaks seen before the financial crisis in 2008.
“All firms will be willing on the strongest growth sectors, from life sciences to office space, in the hope of breaching the magic 12,000 monthly transactions by the summer.
“Shifting dynamics in the property market are increasing the squeeze on property lawyers to compete in a slowing sector environment. Protracted timescales and higher risks are threatening the success of deals and mean any time saving and legal efficiencies are no longer just a nice-to-have, but a can’t-live-without. Using data and AI tools to improve accuracy and efficiency for a pressurised workforce, from lawyers right through to planning officers, is key to building longer-term resilience.”
Mortgages harder to find
Nearly all mortgage brokers claim affordability has become even more complex in the last 12 months,
Mortgage Broker Tools (MBT) said over 90 per cent of mortgage advisers it surveyed felt it was more a of challenge to place a client with a mortgage.
According to the study, 89 per cent of brokers say they have to work harder now than this time last year to secure the loan size their clients want, as a result of the cost-of-living crisis and rate rises.
Tanya Toumadj, chief executive at Mortgage Broker Tools, said“Affordability is getting more complex and brokers are having to work harder to secure the loan size their clients want. “
“Given the cost-of-living crisis and recent rate rises this is perhaps an obvious statement, but the almost unanimous consensus amongst brokers is surprising. Affordability is quickly becoming the biggest issue in the mortgage market and we have certainly seen an uplift in the number of brokers registering to use MBT. As complexity increases, accuracy becomes even more important and MBT offers brokers the most accurate affordability platform available in the market.”