HMRC data shows that house sales fell by a fifth amid soaring interest rates

HM Revenue and Customs (HMRC) figure show that in October house sales fell by a fifth as high interest rates are holding back buyers.

In October an estimated 82,910 houses were sold which is 3% lower than seen in September and in the financial year from April to October around 589,470 sales happened. This marks the lowest number of house sales since 2020.

Jason Tebb, chief executive of property portal OnTheMarket.com, said, “Despite challenging market conditions there hasn’t been a drastic fall-off in transactions, which are regarded as a more useful indicator of the health of the housing market than property prices.

“Numerous interest rate rises have inevitably impacted activity, heightening borrower concerns around affordability.

“However, the pause in increases, raising hopes that base rate may have peaked, is supporting buyer confidence.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Transaction numbers have slipped again in the face of higher interest rates and the cost of living, as borrowers reassess what they can afford to pay.

“Encouragingly, the direction of travel for new mortgage rates is downwards, with fixed rates looking increasingly attractive.

“However, borrowers do have to accept that they will pay considerably more now than in the heady days of sub-1% mortgages.”

Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages said, “In terms of property transactions, 2023 and 2022 were worlds apart. This data reflects the period when monthly base rate increases really started to challenge the housing market and hit sentiment hard.

“Completions on the whole are also taking a lot longer so this data may also reflect the fallout from the mini-Budget. Additionally, there are backlogs at the Land Registry, which could be impacting these figures based on stamp duty returns.

“With lenders now heatedly competing for market share, we are seeing a definitive uplift in enquiries from purchasers and so the data should be far stronger next year.”