Posted on Monday, April 3, 2023
- Official data indicates sales volumes in February were 4% lower than January, while mortgage approvals for the month were 10% higher, the most significant uptick at this time of year since 2011.
- In the 5 years prior to the pandemic, mortgage approvals in February were on average 1.2% lower than in January. With mortgage approvals considered a forerunner of housing market activity, demand in the sales market is likely to rise over the spring.
- The mortgage market is stablising. The decision by the Bank of England to raise the base rate of interest to 4.25% was largely expected and there has been little movement in long-term swap rates since the announcement.
- Spikes in sales volumes in recent times have historically been linked to government changes to property taxation. The impact of changes in 2016 and 2021 is clearly visible.
- In the last decade peaks in the sales market have been associated with changes to property taxation including the 3% surcharge on additional homes in 2016 and the Stamp Duty Holiday in 2021. Source: Dataloft, HMRC, Bank of England
