"The UK housing market has clearly seen a quieter period over the summer, with consumers choosing to sit tight and take a ‘wait and see’ approach."
July is the second consecutive month in which HMRC has recorded a small increase in seasonally adjusted residential property transaction figures.
Seasonally adjusted residential transactions are up 1% relative to June, however are down 16% compared to July of last year.
Non-seasonally adjusted residential transactions are down 9% relative to June and 22% lower than 12 months ago.
Kevin Roberts, managing director of Legal & General Mortgage Services, said: “Whether buying or remortgaging, the UK housing market has clearly seen a quieter period over the summer, with consumers choosing to sit tight and take a ‘wait and see’ approach. This contrasts against the urgency we saw earlier this year as borrowers raced to lock into new deals in a market of rising rates. However, we expect this pause in activity will likely be short-lived as a more stable market shapes new norms, encouraging buyers to make a move onto or up the housing ladder, and existing borrowers to remortgage as their deals expire.
“As activity picks up, many will need ample reassurance that they are making the right choices about their mortgage, as well as those gifting to loved ones as part of the Bank of Family. In these challenging times nobody has a ‘crystal ball’, but advisers have a golden opportunity to add value by offering professional guidance to help their customers make informed decisions.”
Nick Leeming, chairman of Jackson-Stops, commented: “A further step up in completed transactions for July feels like a hot summer streak when you consider that 2023 began with uncertainty and hesitation. Activity may be down year-on-year, but it’s still within touching distance of the numbers seen throughout the mid-2010s, despite the low interest rate environment being firmly in the rear view mirror.
“Mortgage rates are slowly heading back in the right direction and, while rate cuts have been incremental, borrowers will be relieved and have a chance to catch their breath following a turbulent 12 months.
“It’s important to remember the property market is not wholly determined by mortgage rates; the market is cyclical and while there may be slower periods, a lack of stock and a continual demand will help to avoid a completion cliff edge. Cash buyers and right sizers have both benefited from strong house price growth in recent years and are now able to make their moves relatively unaffected by a temperamental lending environment.
“Heading into Autumn we expect housing is likely to be a defining topic of conversation at the political party conferences and expect it to be central to the major parties’ long-term strategies. Reforms to planning, greater devolution to local councils and green energy infrastructure are all important topics of conversation for Sunak and Starmer to address to give homebuyers confidence that a brighter future lies ahead.”
Thora Kehoe, chief product officer at Smartr365, added: "The UK’s relationship with homeownership remains incredibly strong and as such, many buyers are making sacrifices elsewhere to keep their purchase plans alive. Demand is currently driven by first-time buyers using this period of correcting house price inflation to snap up cut-price pads. Remortgage and product transfer activity also continues to dominate, and I expect this will remain the case for the rest of the year. As such, many lenders continue to compete on pricing in a bid to retain clients, while others are making broader changes (such as extending maximum product terms or accepting wider income types when assessing affordability) to help cement business in the downturn.
