Government figures showed that compared to the month before, there was a marginal 1% fall in housing transactions. This was the first seasonally adjusted monthly decrease recorded since December 2023.
On a non-seasonally adjusted basis, there were 90,420 residential transactions in the UK in June. This was 5% lower than a year ago and 2% down on the previous month.
A momentary blip
Industry professionals said the month-on-month fall in transactions indicated a temporary drop in confidence in an otherwise stable market.
This was largely attributed to uncertainty around the general election and buyers wanting mortgage rates to fall.
Ben Waugh, managing director at More2life, said: “A slight lull in property transactions doesn’t mean that the market has lost the momentum that has been building this year. A price war among major mainstream mortgage lenders has resulted in a string of rate reductions and the gradual return of more competitive products.
“Today’s data is likely a momentary pause before we see a flurry of activity again. With a cut to the Bank of England’s central rate potentially arriving tomorrow, more borrowers might be convinced that the time has come to transact as we move into late summer and beyond.”
Terry Woodley, managing director of development finance at Shawbrook, said the property market remained stable despite the dip in activity.
He added: “Confidence will likely be reinforced by recent Government announcements promising increased support for building projects through housebuilding targets and the Planning and Infrastructure Bill, and optimism is likely to be further bolstered by speculation of a potential base rate reduction, which could sustain the upward trajectory of transactions moving forward.”
A positive housing market
Iain McKenzie, CEO of the Guild of Property Professionals, said transaction numbers had been steadily rising and the monthly decrease was “nothing but a fly in the ointment”.
He added: “It’s important to consider these figures in the broader context of the market’s recovery. The overall trend for 2024 remains positive, and higher transaction levels compared to last year suggest that buyer confidence is gradually returning to the market.
“With some experts predicting to see interest rates fall this week, we could see a consumer confidence soar towards the tail end of 2024.”
Nicky Stevenson, managing director at Fine and Country, said as we entered the second half of the year, there were signs of improved consumer confidence.
She added: “Buyers and sellers alike appear to be adjusting to the improving landscape, finding common ground on pricing and moving forward with their property plans.
“If the Bank of England announces a base rate reduction tomorrow, it could significantly add to the optimistic outlook for the property market. Lower interest rates would likely make mortgages more affordable, potentially stimulating housing demand.
“This change might encourage previously hesitant buyers – especially first timers – to enter the market, possibly leading to increased activity in the coming months.”
This article was first published on Your Mortgage‘s sister site, Mortgage Solutions. Read: Drop in residential transactions in June ends five-month run of increases – HMRC
