Fri 22 Apr 2022
Property market activity increased again in March, with transactions rising by 18.2% from the month before, Knight Frank research has revealed.
This latest increase comes on the back of a 15.3% rise in January.
Tom Bill, head of UK residential research at Knight Frank, said: “Removing the distortive effect of stamp duty changes, property transactions in March this year were the highest they have been for the month in ten years.
“Sky-high demand continues to fuel the UK housing market as the country moves beyond the pandemic.
“However, we expect this to calm down later this year as mortgage rates creep up and the cost-of-living squeeze tightens.
“Furthermore, double-digit house price growth will slow to single digits as supply picks up and the housing market feels more tethered to the economy.”
The Bank of England increased the base rate to 0.75% in March, so it’s expected that the cost of mortgages is on the upward curve.
This may go some way to explaining why there’s such a demand to buy and remortgage.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Demand for mortgages is strong as rates remain competitive, even as Swap rates continue to rise.
“Some heat has come out of the purchase market compared with this time last year which is no surprise and is welcome as that frenetic pace could not continue. Remortgaging activity is strong as borrowers attempt to lock into low mortgage rates before they disappear.
“There are concerns that rising living costs will impact lenders’ affordability calculations when it comes to getting a mortgage, making it more important than ever to seek advice.”
However according to Jeremy Leaf , north London estate agent and a former RICS residential chairman, the market is quieter than a couple of months ago – it’s just that the transactions are now filtering through.
Leaf said: “Transactions are usually a better measure of housing market health than more volatile prices – but not in this instance.
“These figures reflect sales which mainly took place a few months ago when activity was more lively. At the sharp end, we have noticed that since then the rising cost of living and interest rates, especially for those on tight budgets, are contributing to an easing of price growth and a drop in sales.
“Demand still comfortably exceeds supply and correctly-priced houses continue to attract considerable interest while mortgage repayments remain relatively affordable.”
Shaw and co estate agents, 20 High Street, Whitton TW2 7LT