HMRC: October property market activity hits two-year low

The property market activity has hit a two-year low, as HMRC records the slowest October for property sales since 2021 last month.

The latest property transaction figures from the taxman estimates that there were 82,910 home sales during October on a seasonally-adjusted basis.

That is 21% lower than October 2022 and 3% lower than September 2023.

The provisional non-seasonally adjusted estimate of the number of UK residential transactions in October 2023 was 90,920, 17% lower than October 2022 and 2% lower than September 2023.

It is the quietest October since 2021, when there were 76,290 sales on a seasonally-adjusted basis and 85,890 on a non-adjusted basis.

Commenting on the data, Iain McKenzie, chief executive of The Guild of Property Professionals, said:

“A drop in sales is not unusual for this time of year as the busy summer months come to a close and the market begins to settle.

“The annual picture shows a drop in sales of just over a fifth, which is a clear indication that many people are choosing to hold on to their deposit until they are certain they can afford to buy.

“High interest rates over the past year have made mortgage repayments increasingly difficult to keep up with.

“There was anticipation at the start of the year that we would see house prices fall off a cliff, but the readjustment has been more gradual than expected, meaning that some potential buyers are still priced out of the market.

“There are signs that the market will recover in the new year as inflation creeps down, and hopefully interest rates will follow suit.

“Rent prices are still sky-high and buyers should be reassured that if you are able to afford to, now is still a good time to buy.”

Nathan Emerson, chief executive of agency trade body Propertymark, said:

“We are yet to see full consumer confidence resume within the UK housing market and while there are overall early hints a turning point could be on the horizon, we must remain vigilant.

“Andrew Bailey, Bank of England Governor, recently suggested there will be no quick drops in base rate for the foreseeable future to help keep inflation in check.

“Many households continue to grapple with the ongoing cost of living crisis and only when such pressures finally ease will we start to see a healthy momentum in terms of sales volumes fully return.

“Propertymark remain optimistic the entire UK housing market will steadily gain traction, but currently we remain in a phase of transition for the moment.”

Kindly shared by Estate Agent Today