"While it feels overly optimistic to expect any miracle growth figures in the coming months, especially with expectations of another base rate rise on the cards, a more tentative, slow-paced return to normalcy may be more likely"
Non-seasonally adjusted estimates of the number of UK residential transactions in March 2023 is 94,870, 14% lower than March 2022 and 26% higher than February 2023. When seasonally adjusted, 89,560 sales were recorded, 19% lower than March 2022 and 1% higher than February 2023.
Tom Bill, head of UK residential research at Knight Frank, said:
“The steep drop in property sales that followed the shock of the mini-Budget has bottomed out. The mortgage market has stabilised and buyers increasingly accept they are in a new lending landscape after 14 years of ultra-low rates. Buoyed by savings accumulated during the pandemic, record levels of housing equity and a strong jobs market, activity has been solid but not spectacular this year at all price points.
"The further we get from the mini-Budget, the stronger the market is performing. That said, homeowners will experience more financial pain as they roll off historical fixed-rate deals and UK prices should fall by a few percent this year. Properties that tick all the right boxes will hold their value but some of the pandemic froth has now disappeared.”
Emma Cox, MD of Real Estate at Shawbrook, said:
“Sales volumes are yet to catch up with what’s looking like a return in demand to the property market. While buyers and sellers have tentatively been dipping their toes back in, March’s property transactions were subdued.
“It’s not as gloomy as it appears, though. Given how long it can take to complete a purchase, it’s likely a lag from Christmas when the market is typically quiet anyway, compounded by soaring inflation and mortgage rates at that time.
"We’ve seen increased demand from professional property investors, who are making the most of opportunities in the market, and I’m confident that as spring turns into summer, we’ll see a positive trend emerge.”
Les Pick, Sales Director, more2life, comments:
The slight rise in property transactions in March is a sign that Spring is in the air for markets. UK residential transactions have shown their typical stability in recent months and have remained at levels similar to pre-pandemic late 2019 levels.
"With rates as they are this sign of an active market highlights the ongoing strength and resilience of the housing market as homeowners continue to move and first-time buyers take their first steps on the property ladder.
“However, the fact that transactions remain lower than this time last year shows that some homeowners are still wary. When the economic climate has consumers worried, the best thing they can do is to reach out to an adviser for an independent, expert opinion on their concerns. This is particularly true of the over-55s, who are often on a fixed income and due to their spending patterns typically harder hit by inflationary increases to food, utilities and other basics.
“The average homeowner may not always be aware of the minute fluctuations of the market, but they will value the straightforward and indispensable personal advice and varied product options an adviser can offer.”
Sara Palmer, Distribution Director at TML comments:
“Last year’s mini-budget, and subsequent mortgage rate rises combined with the end of the year and holiday period has meant that transaction numbers have been slow in the first quarter of this year. It has taken time to build confidence amongst buyers and sellers and encourage more activity within the market.
"However, signs of optimism are returning. Recent reports indicated that first-time buyers are returning to their property search, with many looking to avoid ever-rising rental prices in property hotspots and instead compromising on property type to get onto the ladder. With house prices falling across some areas of the UK, there are opportunities for both first-time buyers, and more seasoned owners and investors to snap up a deal.
“While it feels overly optimistic to expect any miracle growth figures in the coming months, especially with expectations of another base rate rise on the cards, a more tentative, slow-paced return to normalcy may be more likely.
"Those looking to purchase property should remain vigilant to opportunities within the market, with sellers likely to be more flexible on asking prices as we approach the summer. Keeping a close eye on inflation too, will prove to be a useful tool in knowing when to strike, but patience and perseverance will remain key skills for buyers and sellers alike.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says:
"Although, of course, reflecting buying decisions made up to several months previously, transactions are always a better indicator of market health than more volatile house prices.
"Today’s numbers confirm what we’ve been seeing on the ground for the past few months – buyers and sellers are emerging from a period of uncertainty and responding to an increased supply of properties, as well as more stable interest rates. As a result, property market activity is proving to be much more resilient than we had feared, certainly at the end of last year.
"However, inflation and falling real incomes remain a concern, which is resulting in more hard bargaining and protracted sales."
