HM Revenue & Customs (HMRC) reported just 82,000 residential property transactions in January, adjusted for seasonality, marking the lowest figure for this month since 2013.
Despite this 11-year decline, there was a slight increase from the 80,500 transactions recorded in December, which was the first month-to-month rise since August 2023.
Unadjusted for seasonal patterns, there were 68,090 residential transactions in January, a 20% drop from the month before, which HMRC says is common for this time of year.
The non-seasonally adjusted transactions were also down from January the previous year, which saw 75,690 transactions.
Industry response:
Iain McKenzie, CEO of The Guild of Property Professionals, noted: “There’s a noticeable year-on-year dip of 12% in property deals this January, highlighting the hesitation buyers feel after a rocky 2023 in the housing market.
“Buyer confidence may be on the mend, with interest rates holding steady since September and predicted declines in inflation. Yet, buyers might be waiting for more economic certainty before they decide to purchase.
“Still, there’s a silver lining. The transactions picked up by 2% from the prior month, suggesting a gradual recovery since the December dip. We’re hopeful for more activity in 2024, as more buyers, including first-timers, might enter the market thanks to better-aligned mortgage rates.
“An increase in starter home purchases could animate the market later in the year.”
Nick Leeming, chairman of Jackson-Stops, stated: “Year-on-year, January saw fewer transactions, but this sluggish start isn’t unexpected. Despite this, our network noticed more appraisals and viewings, signaling growing consumer confidence.
“Current volumes reflect the market under Chancellor Jeremy Hunt’s tenure, with speculation of upcoming housing-related announcements before the Spring Budget on March 6. Discussions of new mortgage initiatives, tax reductions, and housing market stimulates could pave the way for changes.
“With a General Election approaching, it’s crucial for the Chancellor to appeal to homebuyers and sellers amid predictions of a Labour victory.
“Any policy shifts won’t bring immediate changes. A balanced housing market, although vital, will take time to adjust buyer demand with seller supply. That said, February’s figures look promising, and we anticipate more deal closures soon.”
Lucian Cook, head of residential research at Savills, shared: “We’re seeing more mortgage approvals due to stabilized mortgage markets and lower fixed-rate mortgage costs.
“Seasonally-adjusted mortgage approvals went up by 7%, reaching 84% of the pre-COVID market level, and the average rate for new lending dropped in January.
“Transaction completion rates remain low but lag behind other more current market indicators.
“According to TwentyCI, housing market conditions improved in February, with a noteworthy increase in the £300,000 to £500,000 price range. However, the market continues to be price-sensitive.”
Amy Reynolds, head of sales at Antony Roberts, commented: “After a quieter last year, we’re seeing a rise in serious buyers and a compelling sales pipeline.
“An election year often slows the market, making this a prime time for sellers to benefit from the increased demand. We’re witnessing interest from upsizers and first-time buyers alike, especially in properties with outdoor spaces.
“A combination of favorable mortgage rates and ongoing supply-demand imbalances are fortifying the market in London.”
Jeremy Leaf, a north London estate agent, mentioned: “Since transaction completion takes months, these stats may not accurately represent the current situation but rather a period influenced by economic uncertainties.
“Nevertheless, things have improved. There’s more activity in terms of valuations and viewings, and fewer sales are now falling through. While the cash and equity-rich buyers are maintaining the market, sellers must remain competitive with their pricing to ensure continued market vitality.”
Maria Harris, chair of the Open Property Data Association, remarked: “The drop in residential transactions continues, which is typical for January and the existing economic climate. With inflation and unemployment news hinting at a recovering housing market, some signs of a turnaround are visible.
“Housing transaction volumes heavily depend on consumer confidence, and our slow home buying and selling process doesn’t help. It’s crucial to make transactions more transparent and straightforward, which requires making property data more accessible and digitally available.”
