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Housing sales down 40% since 2021

Property sales in the UK have fallen by nearly 40% since the Bank of England (BoE) increased interest rates towards the end of 2021

A photo of Daniel Sharpe-Szunko, the author

By Daniel Sharpe-Szunko

Published on: 31 March 2023

2 min read

Housing sales down 40% since 2021

Property sales in the UK have fallen by nearly 40% since the Bank of England (BoE) increased its interest rates towards the end of 2021. The research carried out by Moverly, illustrated the depth of the lack of confidence in the housing market.

Based on the house price sales data from this research, which showed that there were an average of 72,785 house sales per month in the UK between December 2021 and November 2022.

This compares to an average of 96,732 property sales in the 12 months prior to this between December 2020 and November 2021 according to the same figures. The Bank of England first increased interest rates in December 2021 from 0.1% to 0.25%, and then again in February 2022 to 0.5%.

Property sales dropped by 23,946 per month on average which is nearly 25% or a quarter less transactions in 12 months. By November 2022 the Bank of England base rate had risen from 0.1% to 3% which is the biggest increase since the late 80’s.

Read more about the Bank of England’s most recent interest rate update to 4.25% (the 11th consecutive rise).

The 2023 Spring budget has also had a big impact on the housing market and you can find out more in our ‘Budget 2023 update for mortgages and housing’.

Below is a breakdown of the top regions:

  • South East: 30.2%
  • South West: 29.9%
  • East England: 29.8%
  • London: 26.8%
  • East Midlands:25.6%

As a local authority, mid-Suffolk has been the impacted the most heavily with a decline in monthly property sales by as much as 40.1%.

Top 10 regions affected by the interest rate rises:

  • Mid-Suffolk: 40.1%
  • Uttlesford: 39.8% (Cambridgeshire)
  • West Oxfordshire: 39.7%
  • Malden: 39.6% (Essex)
  • Torridge: 39.2% (Devon)
  • Harborough: 38.8% (Leicestershire)
  • Havering: 37.9% (East London)
  • Hambleton: 37.5% (North Yorkshire)
  • Maidstone: 37.4% (Kent)
  • Test Valley: 37.1% (Andover)

Mortgage approval rates for property purchases have reduced consistently across the UK since the interest rates first increased in 2021. Areas that have been most affected are generally those that saw the largest increase in property prices since the pandemic.

One of the areas least affected by the rise in mortgage interest rates is Scotland where the levels have dropped more steadily.

Projections suggest that there is likely to be a further reduction of property prices by as much as 10% in Q3 and Q4 of 2023. This could spark the start of a resurgence in the number of property transactions in the UK but that might be dampened by the expected interest rate of 4.5% and higher mortgage rates.

Other useful MPO articles

Here we have more articles about mortgage news that could have an impact on mortgage repayments and house sales throughout 2023.

Keep informed about the latest mortgage and financial updates on our MPO news page.

Resources

Gov.uk – UK monthly property transactions commentary

Office for National Statistics- UK House Price Index: January 2023

Gov.uk – UK House Price Index for January 2023

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