House sales held steady in October, with the volume of transactions increasing by 2% month-on-month, according to HM Revenue and Customs figures.
An estimated 108,480 sales took place, which was also 38% higher than in October 2021 – when a stamp duty holiday in England and Northern Ireland ended.
Figures released by Moneyfacts.co.uk on Tuesday showed the average five-year fixed mortgage rate has dropped below 6% for the first time in seven weeks.
Mortgage lenders are offering 5.95% on average for a five-year fixed-rate deal. Mortgage rates jumped following the mini-budget and recent Bank of England base rate hikes are also pushing up borrowing costs.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Home completions sailed a steady course through October, but the looming storm is likely to sink sales.
“October saw carnage unleashed in the mortgage market, but buyers, with much lower mortgages already in their back pocket, continued to plough on.
“It means October sales were still slightly above pre-pandemic levels, but this is the relative calm before the storm.
“Sales completing in October were largely agreed around July, when demand had been falling for a couple of months, as mortgage rates started to climb and cooled our passion for property.”
Danny Belton, head of lender relationships at Legal & General Mortgage Club, said: “Demand and activity both remain relatively high despite economic stresses.”
Jason Tebb, chief executive of property search website OnTheMarket.com, said: “Our own data indicates an increase in volume of new properties going under offer within the first month of marketing in October, with 60% of properties sold subject to contract within 30 days of being advertised for sale (up from 53% the previous month).”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Transaction numbers are holding up as buyers with good mortgage offers are keen to complete before they expire.
“There is good news for borrowers as swap rates continue their decline, resulting in several lenders repricing their fixed-rate mortgages.
“For some borrowers, a base-rate tracker with no early repayment charges may be a better alternative until fixed-rate pricing comes down further.”
