A recent study has revealed a significant decline in property sales of up to 40% in certain areas since interest rates began to rise. 

The research by Moverly indicates that another interest rate hike could further dampen market activity, with the average number of monthly transactions across the UK property market dropping by a quarter since the Bank of England’s first interest rate hike in December 2021. 

From December 2020 to November 2021, an average of 96,732 homes were sold each month, while the figure decreased to 72,785 from December 2021 to November 2022. 

The South East experienced the largest decline, with a decrease of 30.2%, followed by the South West (-29.9%), the East of England (-29.8%), London (-26.8%) and the East Midlands (-25.6%).

Scotland has seen the smallest reduction, although there has still been a drop of 10.6% in the average number of homes sold each month.

At local authority level, Mid Suffolk has seen the most drastic reduction in market activity since interest rates started to climb. The average number of monthly transactions seen across the area’s property market has dipped by -40.1% since December 2021. 

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%) have also seen steep drops. 

Just two areas of the UK market have avoided a reduction in transactions since interest rates started to climb; Aberdeen (+2.4%) and Clackmannanshire (+1%) have both seen the average number of homes sold per month increase.

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.”