UK house sales decline for third consecutive month

The number of house sales in the UK stood at 90,210 in August, marking the third consecutive month of decline as the market cooled over the summer.

The latest figures from HMRC show that on a provisional seasonally adjusted estimate, residential transactions stood at 90,210, marginally lower than in July. However, year-on-year, the figures are up by 5%.

“This marks the third straight month of slight declines in seasonally adjusted figures, suggesting a gradual cooling typical during the summer. Nevertheless, the year-on-year increase highlights that the housing market has rebounded, as persistent inflation and interest rate pressures ease somewhat,” said Holly Tomlinson, financial planner at Quilter.

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“Buyers are now better equipped to navigate these challenges, supported by a stabilising mortgage market, particularly as more 4% mortgage deals come into play, and with the realisation that rates are unlikely to return to the levels seen before and during the pandemic,” she added.

The non-seasonally adjusted data for August recorded 104,330 transactions, a 10% increase from August 2023 and an 8% rise from July.

Several mortgage lenders have been cutting their rates in recent weeks as the autumn market gets under way.

“A notable 5% rise in transactions this month, compared to a year ago, demonstrates the demand we're witnessing across the housing market,” said Nick Leeming, chairman of Jackson-Stops.

"This growth is partly driven by greater choice in mortgage products and rising buyer confidence, further supported by last month's interest rate cut by the Bank of England — the first since 2020. As transaction data often lags behind real-time sentiment, we expect this positive momentum to carry through for the rest of the year."

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In contrast, the non-residential property market is showing signs of strain. Seasonally adjusted non-residential transactions fell to 9,760 in August, 3% lower than a year earlier and down 1% from July.

The non-seasonally adjusted figures echo this trend, with an 8% month-on-month decline and a 4% drop year-on-year. This weakness in the commercial and industrial property sectors, according to Tomlinson, reflects broader economic concerns, including tighter credit conditions and faltering consumer spending.

Iain McKenzie, chief executive of the Guild of Property Professionals, said: “The Bank of England has made some cautious progress in lowering interest rates as a result of falling inflation levels in the past year. It is anticipated that it will continue to be much of the same as the year comes to a close.”

Andrew Lloyd, managing director at property data insights provider Search Acumen, said the figures indicate that “homebuyers are keen to capitalise on more favourable borrowing conditions”.

Nicky Stevenson, managing director at estate agent group Fine & Country, said: “Lower interest rates translate to reduced monthly mortgage payments, which should attract buyers back into the market. This change offers greater flexibility in their budgets and the opportunity to consider higher-priced homes.”

Jason Tebb, president of OnTheMarket said: “While falling mortgage rates are improving confidence, affordability remains an issue and sellers must price realistically, particularly if they are keen to move before the end of the year.”

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