MortgagesFeb 21 2023

Property transactions get off to slowest start in a decade

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Property transactions get off to slowest start in a decade
'Transaction numbers dipped as buyers waited to see what would happen with mortgage rates' [Darren Staples/Bloomberg]
ByRuby Hinchliffe

Property transaction volumes got off to their slowest start in over a decade this year, falling 27 per cent since the end of 2022.

With mortgage interest rates yet to settle as lenders continue to announce cuts daily, many clients and their brokers are still waiting to see where rates could end up.

Data published today (February 21) by HM Revenue & Customs showed that - provisionally - house sales reached just 77,390 on a non-seasonally adjusted basis, the lowest transaction volume for January since 2014.

This figure was also down 7 per cent on January last year.

“Over the past few weeks, the general trend for fixed-rate mortgages has been downwards, with a number of lenders launching sub-4 per cent five-year fixes,” said Mark Harris, chief executive of mortgage broker SPF Private Clients.

“Transaction numbers dipped as buyers waited to see what would happen with mortgage rates.”

At the beginning of this month, HSBC launched a fixed 3.99 per cent interest rate on a five-year mortgage, making it one of the first lenders to launch a sub-4 per cent rate since October.

Others have since followed suit, including fellow high street lender Virgin Money.

The heady days of the peak – where at one point we saw more than 214,000 transactions in a month – are well and truly behind us.Sarah Coles, Hargreaves Lansdown

Harris said borrowers are not necessarily out of the woods just yet. He expects to see pricing go up and down over the next few months with no visible trend.

In the past day, Virgin Money has announced both rate reductions and rate increases, for example.

Harris added that swap rates, which act as leading indicators for pricing fixed-rate mortgages, are “jumping around” with five-year swaps falling as low as 3.25 per cent two weeks ago before jumping back up to 3.75 per cent.

“Borrowers may be tempted to wait for rates to fall further but there is a danger that they might not and trying to predict interest rates can be a dangerous game,” he said.

Month and year

Non-seasonally adjusted

Seasonally adjusted

January 2014



January 2015



January 2016



January 2017



January 2018



January 2019



January 2020



January 2021



January 2022



January 2023 [provisional estimates]



Source: HMRC

‘Unlikely to gain momentum for some time’

Spooked by the hike in mortgage rates in the autumn, personal finance head at Hargreaves Lansdown, Sarah Coles, said buyers have “packed up and scarpered”.

Back in September, former chancellor Kwasi Kwarteng announced a sweep of unfunded tax cuts - now nearly all repealed - which sent mortgage rates spiralling.

This meant at the beginning of November, a month after Kwarteng’s "mini" Budget had taken hold, the average two-year mortgage rate had nearly tripled, from 2.38 per cent in January 2022 to 6.47 per cent in November 2022, according to Moneyfacts.