In a notable development within the UK real estate landscape, the total number of residential properties sold in the current year is on course to register the lowest figures since 2012, as revealed by a prominent property website.
It is anticipated that approximately one million property transactions will be finalized by the end of the year, signifying a nearly 20% decline in comparison to the preceding year’s figures in 2022.
The ongoing surge in mortgage and rental costs has been particularly conspicuous since financial institutions embarked on a trajectory of elevating lending rates.
In contrast, properties acquired through direct cash transactions, wherein purchasers do not rely on mortgage financing, are projected to exhibit a relatively resilient performance.
Traditionally, individuals who already own property and opt for mortgage-based purchases constitute approximately one-third of the total annual property sales. However, this demographic of buyers currently seems inclined to await a more favorable interest rate outlook before proceeding with transactions, even as certain regions in the UK witness a decrease in property valuations.
Data provided by the financial information service Moneyfacts indicates that the average interest rate for a two-year fixed mortgage arrangement stands at 6.74%, while a lengthier five-year agreement tends to carry an average rate of 6.22%.
Comparatively, these mortgage expenses are substantially higher than the ultra-low rates, often below 2%, that were accessible to numerous homeowners during preceding years.
The Bank of England has incrementally raised its benchmark interest rate on 14 consecutive occasions, culminating in the present rate of 5.25%. This strategic measure by the central bank is aimed at tempering the escalation of property prices, which have experienced a steep ascent.
