The number of house purchases in Britain this year is on course to drop by a fifth – 21% – to its lowest since 2012 as a result of increasing borrowing costs, according to Zoopla.
The property portal forecast there would be 1m residential property sales this year, down from 1.26m last year and a 14-year high of 1.48m.
Zoopla also reports that average house prices in May were down 2% from their peak last September, but were still more than 20% higher than before the start of the Covid-19 pandemic.
Industry reactions:
Nathan Emerson, CEO of Propertymark, commented: “We know that house prices are thankfully adjusting to more sensible levels alongside increases to people’s earnings which is playing its part in increasing homebuyers’ affordability, helping soften the blow of rising interest rates.
“Our member agents report sales remaining buoyant, however, the number of viewings and valuations have dipped slightly, indicating a shift to only the more serious homebuyers and sellers remaining proactive in the market. Those properties that are currently for sale with motivated vendors in line are selling quickly.”
Matt Thompson, head of sales at Chestertons, said: “With the Bank of England confirming the 14th consecutive rise in interest rates in a row at the start of August, buyers have been more cautious and are in some cases pausing their property search in order to adjust their finances. However, there still are buyers who have already locked in a mortgage rate with their lender and are keen to secure a property before the rate expires.”
“Meanwhile, homeowners remain eager to put their property on the market and wait for the right buyer with Chestertons’ branches registering a 10% increase in properties being put up for sale last month versus the same month last year.”
Carl Jenkinson, director at Venture Properties, commented: “We are still seeing strong activity in the market despite some turbulent months due to mortgage rate increases, which has in turn made some clients more cautious. However, our prices have now stabilised with a little more competition on the market, and our location is still seeing great signs of growth with buyers thanks to continued investment from employers and companies relocating to the North.
“We have already seen many lenders reducing rates over the last few weeks and expect this to be the same over the coming weeks, which is making some clients become ‘rate chasers’ waiting for the best deals. Our buy to let investors have fallen slightly due to the mortgage rates and the criteria involved, although our rental stock remains in high demand.”
Adam Feather, director at Robert Anthony Estate Agents, said: “House prices are continuing to fall and this will depreciate further in the short- to medium-term, as the heat comes out of the property market.
“House prices have long been supported by a wide supply-demand imbalance, but the queue of people looking to buy property is getting shorter, and this will have an adverse impact on property values.”
