Mortgage rates are reining in and transaction levels remain steady as the UK property market continues to hold strong heading towards year-end.

The effects of September’s mini-budget on mortgage rates have already begun to fade, as lenders bring back better deals to the Market and continue to offer a strong range of products to demonstrate a return of confidence.

Meanwhile, new figures released by HMRC of residential transaction rates in the UK for October show that Property Market activity is in fact relatively undeterred by the ongoing economic uncertainty. This is despite fears that there could be a knock to house prices over the next two years.

The UK Property market saw 110,850 transactions in October, which is 29% higher than October 2021. The figure is is 3% lower than September, when looking at the provisional non-seasonally adjusted estimate, while the decline is just 2% compared with last month if using seasonally adjusted figures.

While the knock-on effects of a post-Covid buying surge – alongside the stamp duty holiday – caused transaction levels to soar in the residential property market last year, the data demonstrates that appetite has by no means significantly faltered.

Property market sailing through choppy waters

While popular media headlines have been placing the onus on predictions of stumbling blocks in the market, many in the industry have come forward to highlight the positives that can be seen in the official figures from HMRC.

Danny Belton, head of lender relationships, at Legal & General Mortgage Club, says: “[The] findings confirm that the mortgage market continues to sail relatively steadily through choppy waters.

“Demand and activity both remain relatively high despite economic stresses, while Moneyfacts data also shows that interest rates dropped across the board last week, particularly for three-year fixes. This should go some way to encourage buyers, as will the recommitment to stamp duty tax cuts in the Autumn Budget last week.

“We have shown time and time again that we can weather the largest economic storms – I don’t expect this one to be any different.”

And Vikki Jefferies, proposition director at PRIMIS, points out that the cooling off is all relative compared with pre-pandemic figures, which she argues highlights the “overall resiliency of the market”.

“Given that, despite wider economic uncertainty, there is still demand in certain segments for properties, it is crucial that buyers can access expert advice to help them make the best financial decision for them.”

Look at transaction numbers, not house prices

From a property investment perspective, it can be difficult to overlook news of uncertain house prices and negative predictions, and of course this should be carefully researched before entering into a purchase. However, bearing in mind overall property market confidence should be a key consideration.

This is echoed by Jeremy Leaf, north London estate agent and a former RICS residential chairman: “Transactions are the key barometer of property market health – more significant than volatile house prices.

“These numbers demonstrate clearly a determination of some to take advantage of existing mortgage offers although they do reflect activity in the previous three or four months at least.

“In our offices, we are still seeing some new business slowly emerging, despite taking a severe hit from the rise in mortgage rates and cost of living. Looking forward we expect transaction numbers to decrease slowly as more buyers become accustomed to the new norm.”

Some level of short-term market slowdown seems inevitable as the country gets to grips with the cost of living crisis and people become less economically confident. However, HMRC’s latest transaction figures will certainly be a boost to the confidence of many in the property market that the sector remains robust.