Property sales ‘plummet’ after interest rate rises

Property sales have plummeted by up to 40% in some areas of the UK, according to new research.

The findings from Moverly reveal the average number of monthly transactions have dipped by 25% since interest rates first started to climb in December 2021.

Those rate rises have now seen a reduction of 40% in the worst hit area the market.

‘Market has started to cool since interest rates began to increase’

Ed Molyneux, co-founder of Moverly, said: “There’s no doubt that the market has started to cool since interest rates began to increase and we’ve seen a considerable reduction in buyer activity across almost every area of the UK market.”

Research shows since the first Bank of England interest rate rise, an average of 72,785 properties were sold every month across the UK market.

Before the rate rises, the average number of homes sold monthly in the period December 2020-November 2021 was 96,732. This means that 23,946 fewer homes are being sold monthly across the UK, a drop of almost a quarter (-24.8%).

Mid Suffolk property market has declined by -40.1%

Mid Suffolk in East Anglia has seen the most dramatic reduction in market activity since interest rates started to rise.

The average number of monthly transactions seen across its property market has declined by -40.1% since December 2021.

Other areas hard hit include: the South East (-30.2%), the South West (-29.9%) and the East of England (-29.8%), followed by London (-26.8%) and the East Midlands (-25.6%).

Other areas to make the top 10 include Uttlesford (-39.8%), West Oxfordshire (-39.7%), Maldon (-39.6%), Torridge (-39.2%), Harborough (-38.8%), Havering (-37.9%), Hambleton (-37.5%), Maidstone (-37.4%) and Test Valley (-37.1%).

Two areas in Scotland have seen the average number of homes sold per month increase

However, there are two areas that have escaped a decline and shown a rise in property sales – and they are both in Scotland.

Aberdeen (+2.4%) and Clackmannanshire (+1%) have both seen the average number of homes sold per month increase.

Mr Molyneux said: “It’s rather telling that the most inflated regions of the property market have been worst affected, while Scotland has seen a far more measured reduction.

“This is down to the fact that buyers are contractually obliged to follow through with a property purchase far earlier in the transaction timeline north of the Scottish border.”

He added: “The increasing cost of borrowing hasn’t caused the same level of market instability as it has in the likes of the South-East, where buyers have struggled to secure a mortgage as rates have climbed.”

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