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January resi property transactions hit 11-year low – HMRC

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  • 29/02/2024
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January resi property transactions hit 11-year low – HMRC
There were 82,000 residential property transactions completed in January on a seasonally adjusted basis, which was the lowest level for the month since 2013.

Figures from HMRC showed this 11-year drop was despite a monthly rise from the 80,500 property transactions completed in December, which was also the first month-on-month increase since August last year. 

Annually, the residential transactions during the month were notably lower than the 93,080 completed in January last year. 

On a non-seasonally adjusted basis, residential transactions fell by a fifth month-on-month to 68,090. HMRC said this was typical for January as transactions tended to fall by between 20 and 30 per cent compared to December. 

Compared to last year, the non-seasonally adjusted residential transactions were lower than the 75,690 completed in January 2023. 

 

Expected activity, but positive signs 

Industry figures said the low number of transactions in January was normal for the time of year, but the monthly increase indicated a pick-up in activity. 

Mark Tosetti, group partnerships director at Movera, said the figures were “disheartening” on the face of it, even though a decline in January was not unexpected. 

He added: “However, as transactions are at the end of the homebuying process, they do not necessarily reflect the rest of the market.” 

Data from the Bank of England (BoE) released today showed that approvals for house purchases rose for the fourth consecutive month in January. 

Mark Harris, chief executive of SPF Private Clients, said: “The increase in activity has been down to keener pricing on fixed rate mortgages in particular, but unfortunately the direction of travel for new mortgage rates in the past couple of weeks has been upwards.” 

Industry figures also anticipated what measures would be introduced to support the housing market at next week’s Spring Budget. 

Tomer Aboody, director of MT Finance, said: “While we are moving into a much more positive market with increased sales, we are still seeing lower transactional levels compared with 2022 and early 2023, when rates were constantly climbing and inflation was double the level it is now.

“With rate stability should come an uptick in transactions. However, some assistance from the government next week in the form of an adjustment to stamp duty levels would help those along, providing a boost to the wider economy.” 

Harris added: “The Budget is eagerly awaited, with hopes of some form of assistance for first-time buyers through 99 per cent mortgages or further stamp duty concessions or reform. Anything that would boost transactions and get the market moving would be welcome, as this will filter out to help many connected industries and the wider economy.” 

Yasin Patel, co-founder of ethical property investors Autarky Sukuk, said: “A month-on-month uptick in transactions is a clear indication that there is momentum for growth in the property industry. 

“As inflation creeps down and interest rate rises hold off, there is an increased appetite to buy, and more mortgages are being offered by lenders.” 

Patel said: “2024 has the potential to be a positive year for buyers and sellers alike, but we need to see continued investments into building new homes that are both affordable and good quality. More efforts to ease the cost-of-living pressures facing first-time buyers will go a long way towards getting more people on the property ladder.” 

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