The number of residential transactions recorded on a non-seasonally adjusted basis in the UK this July equalled 110,970, say government statistics.

This is 32.0% higher than July last year, and a 7.2% gain on June 2022.

The data also shows that non-residential transactions, also on a non-seasonally adjusted basis, rose 3.8% annually, to 10,380. This is 5.1% more than in June 2022.

Seasonally adjusted, residential transactions read as 104,470, which is 36.7% more than last year, and, for non-residential transactions, 10,460 – 6.4% more across the same time frame.

MT Finance director Tomer Aboody comments: “Transaction levels are still relatively low which is the main reason that property prices remain high, even though interest rates are going up along with inflation.

“With the need to stem the increase in property pricing, higher interest rates are not the only solution. We have been calling for a restructure of stamp duty for some time, encouraging those in bigger family homes to downsize.

“We are seeing buyers becoming more cautious than in the past few years, fearing rising costs. Borrowers are trying to lock into an extended fixed rate, as inflation is predicted to increase which in turn will push rates much higher, potentially as high as 5% to 6%.”

And IMMO director Anna Clare Harper says: “The significant annual growth in transactions reflects the influence of policy and lockdowns, the last of which ended in July 2021. As a result, it is unsurprising that, with the benefit of temporary stamp duty relief for part of that period, and the absence of lockdowns, transactions have recovered in the last year.

“The flow of ‘essential’ transactions, where a homeowner needs to move, are likely to continue. Non-essential transactions, for example where a property owner owns more than one property, or does not need to downsize, upsize or move, may slow down without the incentive of the temporary stamp duty reduction, and with higher mortgage finance costs due to interest rate rises.

“The trouble with this is that fewer transactions mean households have less flexibility. We are already seeing worsening shortages in rental housing force rents up, and the same is happening in the less flexible market for owned property, although the pace of house price growth is likely to slow.”