Residential property transactions fall by more than a fifth in market slowdown

Commenting on the latest government figures for residential and non-residential property transactions (over the value of £40,000) in July 2023, Stacy Eden, partner and head of real estate at RSM UK, said: ‘Residential property transactions for the four months to July 2023 sat at 336,000, almost a 25% fall on last year and a fifth less than the normal level of residential transactions. In July, transactions were 86,000, significantly below the normal level of 100,000. This highlights the ongoing and medium-term slowdown in the residential market and demonstrates that the housing market is slowing down  due to inflation, flat GDP and rising interest rates. More worryingly, the fall in transactions is driven largely by mortgage-backed purchases, leaving first time buyers trapped by high rent costs and unable to get on the housing ladder. This, coupled with UK mortgage approvals falling more than expected in July, indicates that headwinds remain.’ 

He added: 'With non-residential transactions also slowing, sitting 10% below last year’s levels, this reinforces the impact of high interest rates and financing challenges on the commercial real estate sector. Looking at the bigger picture, residential and non-residential transactions are at a level that is significantly lower than in previous years, and this is unlikely to improve throughout the remainder of 2023, until we see less volatility in the UK economy.'