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Antony Antoniou – Luxury Property Expert

Housing Market Trends – Transactions Hit a 15-Year Low in 2023 Amidst Mortgage Rate Hikes

Housing Market Trends – Transactions Hit a 15-Year Low in 2023 Amidst Mortgage Rate Hikes


In an unexpected twist, the housing market has experienced a substantial setback in the first half of 2023, marking the lowest transaction levels seen in the past 15 years. e.surv, a notable player in the industry and a part of LSL Property Services housing brands, has shed light on the underlying factors contributing to this downturn.

Transactions at Record Lows

The statistics speak volumes: the average monthly sales for the year up to this point have staggered at a mere 37,600, a level not witnessed since the tumultuous times of the 2009 banking crisis. Though data for the entire year is still unfolding from the Land Registry, experts at e.surv are of the opinion that any potential increase in these numbers is unlikely to reach the heights seen previously.

The Mortgage Rate Ripple Effect

e.surv’s insightful analysis indicates that this decline can be largely attributed to the upward trajectory of mortgage rates, which have been steadily climbing throughout the initial seven months of 2023. This phenomenon has rippled across the market, causing a notable reduction in home sales. It serves as a clear reminder of how closely tied economic factors and housing trends can be.

Price Growth and Inflation Dynamics

Digging into the specifics, the average sale price of homes – encompassing both cash and mortgage transactions – in England and Wales for July 2023 displayed a modest increase of £1,300, or 0.3 percent, amounting to an average of £370,610. However, this subdued growth rate signifies the slowest annual increase since March 2012, marking the 11th consecutive month of diminishing price inflation.

Monthly Variations in Prices

From a monthly perspective, July 2023 observed a slight dip of approximately £370, or 0.1 percent, in the average price. This decrease denotes the seventh consecutive month where the monthly growth rate has been on a downward trajectory, albeit at a more gradual pace.

Regional Disparities and Complexities

Richard Sexton, the director at e.surv, delves deeper into these nuances. He points out, “While most regions in England are still displaying positive price movement, the national average has dipped below 1.0 percent. Notably, areas like Hartlepool in the North East have registered remarkable double-digit price growth in the past year. Furthermore, Greater London has ascended from the lower rungs to higher ranks on the price growth league table. These divergent trends underscore the intricate regional variations within the housing market.”

Factors Influencing Wales’ Market

Sexton also identifies contributing factors to recent property price declines in Wales, citing the introduction of council tax premiums for second homes and vacant properties. This policy change has introduced a new layer of complexity to the market, potentially influencing both property prices and buyer behavior, ultimately leading to a decrease in demand.

Navigating Economic Fluctuations

The overarching theme emerging from these market shifts is the undeniable impact of economic changes on the housing sector. The recent downturn in transactions serves as a stark reminder of the market’s responsiveness to financial fluctuations, particularly when it comes to escalating mortgage rates.

Looking Ahead with Caution and Optimism

While the horizon may appear uncertain, recent weeks have brought about positive indicators. Signs of easing inflation and stabilized swap rates in the wake of a July wobble provide some reassurance to the mortgage market for the latter half of the year. The future trajectory of these trends remains to be seen, as the housing market navigates the changing economic landscape.

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