Residential property sales up 4.4% in August: HMRC

When seasonally adjusted, estimates of UK residential transactions during August are 104,980, 7.6% higher than August 2021 and edging up by 1.1% against last month.

Avinav Nigam, co-founder and chief operating officer of real estate technology platform IMMO, says: "Housing transactions are a good indicator of consumer confidence, and because they also affect house prices, hint at how well the economy is doing. Transaction numbers have returned to pre-Covid levels as the market settles, which is good news.

"The increase in August, however, is down to the buoyant market in the spring when interest rates were lower, and those pre-agreed deals being transacted now. The bigger reason may be the distortion in the market created by the stamp duty holiday last year, with buyers bringing forward transactions to take advantage of full tax savings before the end of June 2021.

"However, successive interest rate increases, the affordability crisis, spiralling house prices, and talks of a recession are expected to hurt transactions in winter months unless some financial support is provided or the fundamentals improve.

"The trouble with fewer transactions in winter, combined with unaffordable house prices, is that households will be forced to rent. We already see shortages in rental housing forcing rents up. There's a growing need for professional landlords to offer safe, affordable and quality rental properties in the UK."

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "With the MPC expected to announce at least a 50 basis points increase in interest rates this week, and some forecasters expecting a 75 basis points rise, there is more pain to come on the rate front, which will inevitably impact transactions.

"The majority of homeowners are insulated from rising interest rates as they are on fixed rates. We have seen an uptick in enquiries from borrowers on fixed-rate deals who are prepared to pay exit penalties to get out early and secure a new deal before rates rise further. However, this may not be the best course of action depending on the borrower’s current rate and how long is left to run on it, so it is important to seek advice."

Emma Hollingworth, Distribution Director, MPowered Mortgages, comments: “Today’s transaction figures reflect the continued strength of the property market, despite significant headwinds. As the cost-of-living crisis persists, the market is showing every sign of resilience but within the current inflationary environment, and with interest rates continuing to rise, ensuring transactions run quickly and smoothly is going to become increasingly important - and tech has a big role to play in this.

“With another potential rise in interest rates tomorrow, it remains paramount that the industry also continues to support homebuyers and remortgagers by reimagining the homebuying journey with efficiency and affordability at its heart. At MPowered Mortgages, our suite of prime residential products, for example, includes cashback options, a free valuation on every application, rolling end-dates and no arrangement fee options, all designed to lessen the financial pressure of buying and remortgaging a home.”