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Robust November home sales figures don’t reflect current market

Christina Hoghton
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Christina Hoghton

Property transactions were up in November, but experts note the data relates to sales agreed in the buoyant market before the mini-Budget

There were 114,200 UK residential transactions in November 2022, said HM Revenue & Customs, 12% higher than November 2021 and 4% higher than October 2022.

The figures are also slightly up on pre-coronavirus levels of 110,210 in November 2019.

However, the robust data lags the market because it’s based on sales that have completed and been registered. And this usually takes up to four months to happen following the initial offer.

Transactions recorded in November are therefore likely to have begun well before the disastrous mini-Budget at the end of September. Experts reckon a lot has changed in terms of market sentiment in the meantime.

Ross Boyd, founder of mortgage comparison platform, Dashly.com, explained: “This latest data doesn’t reflect the utter carnage that has ensued since the mini-Budget.

“The fourth quarter of the year has seen transactions drop, as borrowing rates rose sharply and people decided to sit tight, and this will become evident in the figures during the first quarter of next year.”

Kylie-Ann Gatecliffe, director of mortgage broker, KAG Financial, added: “While we have seen a drop in purchase transactions since the mini-Budget, we still have plenty of clients looking to buy. However, with all the uncertainty they are taking much more time to make their decision on a property, as opposed to the madness of the summer when buyers were sometimes forced into a bidding war.

“While transaction levels haven’t dried up, the waters of the housing market feel calmer and this isn’t necessarily a bad thing. Properties are still selling, we just aren’t seeing the boom we saw in the summer.”

Looking foward

Most experts agree that house prices and sales will fall in 2023, as higher mortgage rates and other cost of living pressures make things harder for hommebuyers.

Iain McKenzie, CEO of The Guild of Property Professionals, said: “The overall picture remains mixed as we finish the year, as house prices are expected to fall, but that readjustment could spur demand, as buyers search for a good deal.

“Mortgage affordability is one of the biggest stumbling blocks for first-time buyers at the moment, as it is difficult for them to get on the ladder without knowing if they can afford to keep up with the repayments as food, household goods and energy soar.”

Elliott Culley, director at Hayling Island-based Switch Mortgage Finance, added: “2023 will be a hard 12 months for the property market. The main enemy now is inflation and higher mortgage rates and the effect these are having on people’s’ ability to borrow the amount they require.

“How lenders approach the affordability problem will shape the next 12 months for the property market and influence transaction levels in 2023.”