Residential property transactions remain significantly below market average, says RSM UK

Commenting on the latest government figures for residential and non-residential property transactions (over the value of £40,000) in September 2023, Stacy Eden, partner and head of real estate at RSM UK, said: ‘Residential property transactions between April to September 2023 sat at 507,000, a 20% fall on last year and the pre-pandemic normal. In September, transactions were 85,610, significantly below the normal level of 100,000. This highlights the ongoing and medium-term slowdown in the residential market and demonstrates that demand for housing has slowed down due to inflation, flat GDP and rising interest rates. The latter has led to net mortgage approvals in September 2023 to be 35% lower than in September 2019, with remortgages at their lowest level since January 1999, according to the Bank of England.  We are clearly seeing a market where transactions are now fixed at a level below what we are used to and it is no surprise that housebuilders are scaling back their plans, as first time buyers cannot enter the market due to the significant rise in rent.’ 

He added: ‘With non-residential transactions 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 lower than in previous years. However, as transactions are at a similar level to last month, this may indicate that with interest rates potentially peaking, there is good news on the horizon.’