Has the property market been cooling since the start of the pandemic?

Research by specialist property lending experts, Octane Capital, suggests that despite the well documented pandemic property market boom, housing market activity has actually been on the slide since the first quarter of 2020, at least where mortgage fuelled transactions are concerned.

Last week, Nationwide revealed that house prices have hit a new all-time high as buyer activity continues to outstrip restrictive stock levels.

However, a fifth consecutive increase in interest rates has left many questioning if a cold snap is on the horizon and it would seem that the frost has already started to set in when it comes to buyer intent within the market.

In fact, the latest Bank of England data shows that the level of mortgage approvals has been on the slide over the last few months. The latest figures show a monthly total of 65,974, down 10% in three months and some way off their recent peak of 80,464 in June of last year.

But Octane Capitals’s latest analysis suggests that while the number of mortgage approvals may have climbed during the pandemic, mortgage fuelled buyer appetite has actually been on the slide since well before the recent rise in interest rates.

The data shows that in the 28 months since the start of the pandemic, there have been 3.6 million mortgage transactions across the UK, which equates to 129,000 per month.

This is actually a 6% dip when compared to the 28 months before the pandemic struck, when there were 3.8 million mortgage transactions, or 137,000 per month.

CEO of Octane Capital, Jonathan Samuels, commented:

“The UK government’s pandemic housing market interjections did indeed help to supercharge the market at a time when the economy faced profound difficulty. However, when it comes to the proportion of transactions being facilitated by the mortgage sector, this helping hand hasn’t been enough for the market to match its pre-pandemic performance.

Although topline house price growth remains robust, there is no doubt that harder times lie ahead for UK homebuyers and a string of consecutive base rate increases have already started to rock the boat where mortgage approval levels are concerned.”