Property sales slump in September as mortgage rates remain high - HMRC

The number of property sales recorded by HMRC is at its lowest level for almost a decade.

New HMRC property transactions data from the taxman shows estimates there were 85,610 home sales recorded during September on a seasonally-adjusted basis.

This figure is down 17% annually and 1% lower than in August.

The provisional non-seasonally adjusted estimate of the number of UK residential transactions in September 2023 is 92,600, 19% lower than September 2022 and 2% lower than August 2023, according to HMRC.

It is also the lowest number of sales for September since at least 2014, based on how far back HMRC records go.

Frances McDonald, director of research at Savills, suggested buyers are waiting for mortgage rates to drop further.

She said: “Despite an improvement in mortgage rates since the summer, transaction levels continue to be subdued as buyers remain cautious, adjusting their budgets to a higher interest rate environment.

“Cash buyers have been taking an increasing share of the market and those with existing housing equity or higher levels of wealth have been better able to transact in the current market. September’s muted mortgage approval numbers suggest this trend is likely to continue for at least the remainder 2023.

“This chimes with the latest TwentyCi data, which shows that agreed sales net of fall throughs remain 17% below their 2017-19 average for the month. Ongoing activity continues to be facilitated by a 30% rise in price changes over the same period, and net agreed sales are 28% higher than in October 2022, immediately following the mini-budget.
 
“We expect transaction levels to improve once we see a more significant decline in mortgage rates.”

Iain McKenzie, chief executive of The Guild of Property Professionals, added: “After a few months of rising sales, a slight fall in September shows the market is not out of the woods yet.

“Although there are signs that the economy is recovering, the reality for many households is that they are still not able to afford to buy in the current climate. Budgets are squeezed and some may have dipped into their deposit savings to get them through the cost-of-living crisis. 

“All eyes will be on the next few months, as they are key indicators for the vitality of the property industry. There is usually a rush to complete purchases at the end of the year, as people look to get settled in before the festivities commence and hunker down for the winter.”

McKenzie said the Autumn Statement could introduce some measures to help Brits get on the property ladder, including an extension of the mortgage guarantee scheme for a further year and potentially another form of help-to-buy scheme. 

He said: “The proposed changes to the leasehold system on new builds could also give some assurances to first-time buyers that are looking at buying a property for the long term. While we welcome any new incentives to buy, the proof is in the pudding as to whether or not they will work.”