Residential property transactions fall in market slowdown but market stabilisation on the horizon

Commenting on the latest government figures for residential and non-residential property transactions (over the value of £40,000) in August 2023, Stacy Eden, partner and head of real estate at RSM UK, said: ‘Residential property transactions between April – August 2023 sat at 423,000, a 20% fall on last year. In August, transactions were 87,000, 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. There was however some positive news in that residential transactions in August were 1% higher than July, indicating that a further slowdown will not occur. The five-monthly 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. But, given the fall in mortgage rates recently, the recent downward trend seems to have stabilised.’

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, but the fact that transactions are at a similar level to last month, may indicate that with interest rates potentially peaking there is good news on the horizon.’