"Improved mortgage rates, which have boosted buyer and seller confidence since the start of the year, are not yet being reflected in the official data."
- Mark Harris, chief executive of SPF Private Clients
Residential property transactions fell by 20% in January compared to December 2023, and remain 10% lower than in January 2023, according to the latest HMRC statistics.
HMRC says this decline is typical for January, where monthly falls tend to be between 20% and 30%.
In contrast, seasonally adjusted residential transactions in January showed the first month-on-month increase since August 2023, rising from 80,500 in December to 82,000 in January. Despite the month-on-month increase, this is the lowest level of seasonally adjusted residential transactions in January since 2013.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Transaction numbers dipped again in January as improved mortgage rates, which have boosted buyer and seller confidence since the start of the year, are not yet being reflected in the official data.
“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. Lenders have increased their fixed-rate pricing at short notice in order to stay on top of service levels. It’s a painful reminder that there may be bumps in the road and there are no guarantees – if you see a rate you like the look of, you would be wise to secure it.
“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.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, added: “Transactions can take many months to complete so these figures do not necessarily reflect what is happening on the ground now but a time when decision-making was negatively impacted by high inflation and mortgage rates.
“Since then, the picture has improved. In our offices, an increase in valuations, listings and viewings combined with fewer fall throughs than this time last year are feeding through to agreed sales, mortgage approvals and exchanges. Activity continues to be supported by the cash and equity-rich buyers, particularly while interest rates remain relatively stable.
“However, lingering economic worries and increased property choice mean the market remains price sensitive so only competitively-priced properties are commanding attention. Sellers need to price realistically otherwise offers won’t be forthcoming and market improvements may not be sustained."
