Lower mortgage rates have boosted activity in the residential housing market with the number of housing transactions rising 10% year on year, according to HMRC data.
Its figures show there were 104,300 residential housing transactions in August – 10% higher than August 2023, and 8% higher than figures for July this year.
However, this increased activity is not feeding through to other parts of the housing market, including buy-to-let. This HMRC data shows that the number of UK non-residential transactions in August was 4% lower than August 2023 and 8% lower than July 2024.
HMRC said these are provisional figures, calculated on a non-seasonally adjusted basis.
SPF Private Clients chief executive Mark Harris says: “With one interest rate cut behind us and further to come, buyers are more confident about taking the plunge. It helps that lenders are engaged in a mortgage rate war, with Coventry Building Society today launching the market-leading five-year fix, pegged at 3.69 per cent.
“Some lenders are also easing criteria to assist first-time buyers onto the ladder, with Nationwide prepared to lend up to six times income.”
He adds that there are now a number of five- and two-year fixes at under 4%. “There is increased choice to tempt buyers. This should further boost transaction numbers this autumn, assuming the Budget doesn’t throw this off course.”
Legal & General Mortgage Services, managing director Kevin Roberts adds: “Today’s figures show that the property market is still wrestling a lot of pent-up demand. However, as we enter a traditionally busy period for the mortgage market, lower rates, positive sentiment and lower inflation may well push many buyers to pull the trigger on home purchases.
“With a 14% increase in new properties for sale compared to last year, there are opportunities for buyers and movers, and we may see a wave of activity in Q4 and early 2025.”
Specialist lender MT Finance director Tomer Aboody adds: “We are seeing the positivity and push due to lower interest rates and in turn, more affordable mortgage rates.
“While some buyers and sellers are waiting for a potential further decrease in rates, which will hopefully come before Christmas, others are taking the plunge having decided that another rate drop won’t significantly benefit their ability to purchase.
“As we await the Budget, which has been suggested will be ‘ painful’, further activity in the market might stall as people await the fallout.”
