Hot property: More houses are being sold despite interest rate hikes

·Reporter
·2-min read
Property transactions rose in August. Photograph: Getty.
Property transactions rose in August. Photograph: Getty.

Property transactions in the UK continued to rise last month despite the Bank of England's six consecutive interest rates rises making borrowing more expensive.

New figures from the HM Land Registry, published on Wednesday, showed the provisional non-seasonally adjusted estimate of residential transactions in August stood at 114,440.

Read more: Interest rates: Should you fix your mortgage now?

That was a 4.4% month-on-month rise from July, and was 9.7% higher than levels seen a year earlier in August last year.

The number also represents an elevated position when compared to pre-pandemic levels – transactions in August 2022 were up 2.5% compared to the 111,600 seen in the same month in 2019.

Chart: HM Land Registry
Chart: HM Land Registry

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: "Sales completing in August were largely agreed in April and May, when the pain of energy price rises was already being felt.

"On the one hand, this is a clear indication that those who have enough cash to see them through this crisis are still prepared to dig deep for property. On the other, it’s still early days.

"We know that demand only really started to fall from May when people had time to adjust to their new outgoings, and reconsider a move up the property ladder.

"At the same point, agents started to report that buyers were getting increasingly cautious, so we can expect some of this to show in the figures as we move into the autumn."

Read more: Average UK house price hits £292,000 — biggest jump in 19 years

Wednesday's figures come as the government is said to be considering to cut stamp duty on property purchases in a bid to stimulate economic growth.

According to reports, the prime minister and chancellor Kwasi Kwarteng will announce the measure on Friday as part of the mini-Budget.

Coles added: "The very fact that we’re hearing reports that the government is considering a Stamp Duty holiday is a sign that they are worried.

"We will have to wait to see whether this comes to fruition. If it does, we don’t know whether it will effectively stimulate demand or whether we have stamp duty holiday fatigue at this stage."

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