House sales fall to lowest level since pandemic
House sales have fallen to their lowest level since the pandemic as a lack of first-time buyers “glues the whole market up”.
The Government’s latest figures suggest just 336,860 property transactions took place between April and July this year, down 21pc on the same period last year and the lowest figure recorded since the pandemic.
Transactions in July were also down 16pc compared with July last year. Excluding the pandemic years 2020 and 2021, the last time house sale figures fell this low (86,510) in July – typically a buoyant month for the market – was before 2014, when HM Revenue & Customs’ data collection began.
James Bull, of Huddersfield-based broker JB Mortgages, called this year’s property market “a shadow of what it was last year”.
He added: “Throughout the year, the purchase market has really slowed as the impact of higher mortgage rates has kicked in.
“There are regional variations but the one constant is that only realistically priced properties will sell. But many existing homeowners see this as a bad time to sell a house so there are not enough properties for sale to meet the demand.”
Earlier this week, Zoopla predicted house sales will fall to their lowest level since 2012 over the course of this year.
Trade body UK Finance also reported a 28pc dip in first-time buyer purchases in the second quarter of this year.
Charlotte Nixon, a mortgage expert at wealth manager Quilter, said as it has become even more daunting for aspiring homeowners to make a move on the property ladder.
The average two-year fix is now 6.72pc according to data firm Moneyfacts – up threefold from where mortgage rates stood less than two years ago.
Increased borrowing costs have driven some first-time buyers to take out longer mortgage terms, in an effort to stretch the payment over a wider period and reduce monthly outgoings.
Ms Nixon said the lack of first time buyers “glues the whole market up”, and that the 16pc drop in sales last month was “significant” in what should be a typically busy time for purchases.
She added: “The Bank of England’s recent decisions, including previous rate hikes, are magnifying these challenges. As lenders adjust their terms, we might witness an even sharper rise if there are further monetary policy shifts.”
Since December 2021, central bank governor Andrew Bailey has raised the Bank Rate 14 consecutive times – and two further increases are expected. The rate currently sits at 5.25pc.
