'Deep freeze' as housing transactions down: HMRC

Even adjusting transaction levels for seasonal expectations saw a decrease of 1% in September, which is the first month-on-month decrease since May 2023 and are 17% lower than transaction levels in September last year.

Non-residential transactions - such as commercial property, land purchases and mixed use transactions - however, saw a 7% increase in September.

Charlotte Nixon, mortgage expert at Quilter, said:

"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 fare 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."

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.