Recent figures released by HMRC show a decrease in UK residential property sales for January. Compared to the same month last year and the previous month, the numbers are down by 10% and 20%, respectively, with 68,090 transactions recorded.
Positive signs come from the Bank of England, however, with a report stating an increase in mortgage approvals for home purchases from 51,500 in December to 55,200 in January. This rise suggests a healthy future demand for borrowing. The number of re-mortgaging approvals remained consistent at 30,900, while the effective interest rate on new mortgages saw a slight decrease to 5.19% in January.
Jason Tebb, President of OnTheMarket, shares his thoughts on the current state of the property market:
“The reduction in property transactions this January was expected, given the agreements had been made in a period of elevated mortgage rates and inflation. Yet, the Bank of England’s report of rising house purchase approvals hints at a recovering market, mirroring the increase in inquiries and listings observed by estate agents since the beginning of the year.
With mortgage rates easing and inflation receding, industry optimism is growing. There’s anticipation of potential interest rate cuts by the Bank of England and possible supportive measures in the Chancellor’s Budget, particularly for first-time buyers.
It’s crucial for sellers to be realistic with pricing, as buyers are still adapting to the reality of higher mortgage rates. Nonetheless, the arrival of spring may present ideal conditions for those contemplating when to enter the market.”
