Mood darkens during toughest September in a decade for property

Sarah Coles, head of personal finance at Hargreaves Lansdown, comments on the publication of the HMRC property transactions showing mood darkens during toughest September in a decade for property.

Key points from publication:

• • Property sales (seasonally adjusted) in September were 85,610. That’s 17% lower than a year earlier, and 1% lower than August.
  • It’s the first monthly fall since May – and reflects the fact that mortgage rates had been rising since the spring.
  • It’s the slowest September in a decade.

Sarah  says:

“The worst September in a decade reflects how tough the property market was in the summer, when mortgage rates were surging again.

“And despite a slight easing since, the gloom that settled over the market doesn’t seem to have shifted significantly.

“Given it takes three or four months for agreed sales to be completed, these figures reflect deals done in the summer.

“At that point, concerns about sticky inflation meant more rate rises were priced into mortgage deals, pushing two-year fixed rates up to a recent peak of 6.85% at the start of August.

“More buyers were either priced out of the property they wanted, or became convinced this wasn’t a good time to make a commitment.

“Since then, mortgages have dropped back – but are still significantly ahead of where they were in the early spring.

“And the slight ease doesn’t seem to have lifted the miserable mood that settled over the market.

“RICS figures for September showed buyer numbers and sales completions were both falling, while Zoopla’s figures this week showed house prices down 1.1% – the sharpest year-on-year fall in price growth since 2009.

“It seems that it may well take more significant mortgage rate falls to clear the dark clouds that have settled over the property market, and at the moment we’re not expecting this until well into 2024.”

Kindly shared by Hargreaves Lansdown