Property Sales Down by 40% in Some UK Regions Since First Interest Rate Rise

Property Sales Down by 40% in Some UK Regions Since First Interest Rate Rise

According to a recent study, the rise in interest rates has resulted in a significant decline in property sales – up to 40 per cent in some regions. In addition, the research indicates that another interest rate hike could further dampen market activity.

Figures revealed by Moverly showed that the average number of monthly property transactions across the UK property market dipped by a quarter since the Bank of England’s decision to raise interest rates in December 2021.

An average of 96,732 homes were sold each month during the period from December 2020 to November 2021. But that figure plummeted to 72,785 from December 2021 to November 2022 monthly across the UK property market, a drop of just under a quarter (-24.8%).

Breaking this down into regions, it’s the South East which has seen the largest decline, with the average number of homes sold every month falling by 30.2 per cent. The South West followed hot on its heels with a 29.9 per cent drop, while the East of England saw drastic reductions in its market activity by 29.8 per cent. The capital followed at 26.8 per cent, while the East Midlands saw a drop of 25.6 per cent.

Terraced red brick homes in London

Across the border, Scotland saw the smallest decline, although still significant at 10.6 per cent in the average number of homes sold each month. Just two areas of the UK market avoided a reduction in transactions since interest rates started to climb.

Aberdeen’s sales increased by 2.4 per cent, while Clackmannanshire, the smallest council area in mainland Scotland saw a 1 per cent increase in the average number of homes sold per month.

The worst hit area of the market, according to the digital upfront property pack provider, is Mid Suffolk. The average number of monthly transactions seen across the Mid Suffolk property market has dipped by 40.1% since interest rates started to climb in December 2021.

Other areas to make the top 10 that saw a drop in monthly sales 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%).

Ed Molyneux, Moverly co-founder, commented, “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. However, 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.”

He added, “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. So 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.”

Read more property news, guides and features here.

Property Sales Down by 40% in Some UK Regions Since First Interest Rate Rise 2

Sabi Phagura

Deputy Online Editor

Sabi Phagura is a health, fitness, travel and lifestyle journalist with over 14 years experience in both print and broadcasting media. With Luxurious Magazine, Sabi has travelled the world and experienced some of the finest things that it has to offer. Sabi is one of our most eager and enthusiastic journalists regularly finding unique and exciting destinations. She always creates articles that showcase the subject in the best light via her wealth of knowledge in the luxury travel and dining sectors.

error: Copying this content is prohibited by Luxurious Magazine®