Housing transactions were down 16% in the year to July 2023, to 86,510. This significant reduction in the volume of transactions reflects weaker confidence and demand.
Transactions are down because higher interest rates make buying and owning property much less affordable, regardless of house prices. Up to 2 million property owners are facing double or triple their previous housing costs by the end of 2023. Some will seek a fast exit at any price, limiting overall house price growth. New purchasers as those reliant on bank finance are no longer willing or able to pay the price level we adjusted to in 2022. Only cash owners or purchasers are not directly affected.
However, outright home ownership with no mortgage is the largest – and luckiest – group of property owners. 8.8 million (36%) homes in England are owned outright, and they are unaffected by mortgage interest rates. For this reason, fears of a ‘house price crash’ are unrealistic.
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