Transactions plummet to 15 year low according to e.surv

Transactions for the first half of 2023 are at their lowest level since the financial crisis of 2007-09 as a result of rising mortgage rates. 

That’s the view of e.surv, part of LSL Property Services, which has Reeds Rain and Your Move within its brands.

It says that the year to date has seen an average of only 37,600 sales per month – the lowest level of transactions over this period since the banking crisis of 2009. e.surv says that although data for each of the months in 2023 is still emerging from the Land Registry, and will probably rise a little, they are unlikely to return to earlier peaks. 

It adds: “Most housing commentators would agree that the reduction in home sales in 2023 is associated with further increases in the Bank Rate that have been taking place throughout the first seven months of the year.”

On an annual basis, the average sale price of completed home transactions using cash or mortgages in England and Wales in July 2023 rose by just £1,300, or 0.3 per cent, and now stands at £370,610. 

This is the lowest rate of annual increase since March 2012, says e.surv, and is the 11th month in succession in which the annual rate of price inflation has fallen. On a monthly basis, the average price dropped in July 2023 by some £370, or just 0.1 per cent: this was the seventh month in succession that the monthly growth rate has fallen, albeit at a slowing pace. 

Richard Sexton, director at e.surv, comments: “Most regions in England continue to register positive price movement, though this has fallen below 1.0 per cent nationally. 

“There are some outliers with Hartlepool in North East registering double-digit price growth in the year. In addition, Greater London has moved from the bottom to higher ranks in the price growth league table. This disparity highlights the regional variations and complexities within the housing market. 

“The recent decline in property prices in Wales can be attributed to a confluence of factors. The introduction of council tax premiums for second homes and vacant properties has created a new layer of complexity to the market. This policy shift has potential repercussions for both property prices and buyer behaviour, leading to a dampening effect on demand. 

“Transactions for the first half of 2023 are at their lowest level since the financial crisis of 2007-09, reflecting the market's responsiveness to economic changes, particularly rising mortgage rates. In recent weeks, positive signs have emerged as inflation shows signs of easing along, and swap rates have stabilised following a wobble in early July, bringing some assurance to the mortgage market in the second half of the year.”