The number of property sales taking place in July was 16 per cent lower than it was in the same month last year, as reduced lending rates failed to allay prospective buyers’ hesitancy.
Some 86,510 sales on properties were completed in the UK throughout the month, up only per cent when compared to June, new figures from the HMRC show.
Mortgage rates have skyrocketed in recent months due to a series of interest rate hikes made by the Bank of England.
While many lenders have since reduced the rates of their deals, prospective buyers still appear hesitant to purchase a property.
“The dampening in demand is particularly noticeable in southern England where higher mortgage rates have deterred buyers,” Imran Khan, co-founder of Canary Wharf-based PropertyLoop, said.
“Vendors now know that realistic pricing is no longer optional but a necessity to close deals. The key determinants for house prices over the next 12 months will unquestionably be inflation, interest rates and the overall economic climate.”
Yesterday figures from the Bank of England’s Money and Credit report showed that the number of mortgage approvals fell sharply in July, dropping to 49,400 from 54,600, in June.
Earlier this week figures from Zoopla projected that housing sales are set to be 21 per cent down on last year and the number of mortgage lead sales on homes projected to be 28 per cent lower than last year.
’There is some hesitancy as to whether now is a good time to buy while there is uncertainty as to where interest rates will peak and what will happen with property values,” Gareth Lewis, managing director of property lender MT Finance, said.
‘As we’ve been saying for a while now, we need some stability in order to give buyers and sellers confidence. The volatility of the past few months, combined with soaring living costs, are extremely unhelpful to the smooth functioning of the market.’