The latest HMRC property transaction data for January 2024 indicates a mixed picture for the UK property market, with residential transactions experiencing a downturn compared to the previous year, yet showing signs of recovery from December 2023. The provisional seasonally adjusted estimate for UK residential transactions is 82,000, marking a 12% decrease from January 2023 but a 2% increase compared to December 2023.
Non-seasonally adjusted figures paint a starker contrast, with residential transactions at 68,090, 10% lower than January 2023 and 20% lower than the previous month. This decline aligns with typical January trends, where monthly falls range between 20% and 30%. Despite this, seasonally adjusted figures for January indicate the first month-on-month rise since August 2023, climbing from 80,500 in December 2023 to 82,000 in January 2024. However, this level is the lowest for January since 2013.
Non-residential transactions also saw a decrease in non-seasonally adjusted figures, with a 17% drop from December 2023. Meanwhile, seasonally adjusted non-residential transactions slightly decreased by 1% from the previous month but increased by 1% compared to January 2023. This stability in seasonally adjusted non-residential transactions highlights a market that has seen little movement beyond a 1% change in either direction for five consecutive months.
Reaction
Craig Fish, director at Lodestone Mortgages & Protection:
“These numbers show the level of uncertainty in the property market right now, specifically higher rates affecting affordability. However, sentiment does seem to be improving and enquiries are increasing, although the recent rate turmoil has scuppered things slightly. Let’s hope that Jeremy Hunt pulls the proverbial Easter Bunny out of that hat and surprises us all with some incentives that are too good to refuse. A rate cut from the Bank of England would also reignite confidence in bricks and mortar.”
Justin Moy, managing director at EHF Mortgages:
“January is typically a slower time for home transactions anyway but with a significant reduction compared to January 2023, that just shows how far the property market has fallen in the past 12 months.
“Though there have been some green shoots of recovery since the start of the year, serious intervention is needed to give the property market a boost and bring confidence back to homeowners. That can only come from the Bank of England cutting rates as soon as possible.”
Gary Bush, financial adviser at MortgageShop.com:
“The fact January transactions were up 2% on December is a glimmer of good news. Right now, the UK is going through a mortgage rate crisis, after the mortgage rate war that started the year. Owing to the timescale to complete on property purchase transactions the data we all want to see is probably not going to appear until April/May 2024 if not later, depending on chains. ONS data is often a little harsh to read, lagging behind property data provided by Halifax and Nationwide.”
Ranald Mitchell, director at Charwin Private Clients:
“While the figures don’t look amazing, this is reporting on the tail end of last year. A forward glance to February 2024 is an improved scenario, seeing a noticeable uptick in buyer demand, agreed sales and more new listings.
“Much of this will be down to more sensible sales pricing, and there’s little evidence of the crash that some had predicted.
“A newfound acceptance of what mortgage rates now look like will also be a factor in buyer demand now increasing, with those waiting for significantly better market conditions are realising that if they do, they’ll probably never buy a property.”
Ben Perks, managing director at Orchard Financial Advisers:
“There are some signs that, as rates improved over the final quarter of 2023, transactions improved slightly. That’s a win after a rollercoaster 2023. There will be a delay in the true figures and the next batch of data will hopefully make for better reading. Confidence is growing, slowly. Some stability in mortgage rates going forward would help improve the transaction figures greatly.”
Michelle Lawson, Director at Lawson Financial:
“Though these figures don’t make for great reading, we have certainly seen an increase in activity during 2024. However, people are still concerned about the fluctuation of mortgage rates. We just need a common sense budget on 6th March that can reignite the economy and get money moving rather than the damp squib disaster from Liz Truss’ short reign.”
Graham Cox, founder at Self Employed Mortgage Hub:
“Completed transaction volumes in January were down by 12% on the same month last year, highlighting how higher mortgage rates have dampened demand. Due to the lag, these figures probably reflect transactions agreed in late summer/autumn 23 when rates were falling but still close to their summer peak.”
Nathan Emerson CEO Propertymark:
“As people’s finances start to recover, it is always inevitable that housing transaction figures will not surge at the start of a new year – in fact a drop is to be expected as the strongest time to sell a home is normally spring.
“With the banks offering more competitive mortgage products and interest rates not rising, affordability will continue to improve as 2024 continues. This should then result in more people starting to put their houses onto the market which tends to lead to a surge in transactions down the line.”
Chris Little. Chief Revenue Officer:
“Although activity in the UK housing market has picked up in recent months, the horizon is not without a cloud or two. As many expected, January did see a slight uptick in transactions, most likely in response to a dip in property prices and the wave of sub-4 % deals that entered the market in early 2024. However, as lenders announce a wave of rate increases in recent weeks, many homeowners will look towards brokers for guidance in a market sandbagged with a highly constricted supply.
“As we approach the Spring Budget, the market is rife with discussion on the possibility of a new Government-supported 99% mortgage. It’s difficult to tell whether such a programme with give the FTB market a shot in the arm or exacerbate the ongoing supply problems. As such, lenders and brokers must leverage digital technology to keep in regular communication with borrowers, who will expect to receive tailored guidance as they navigate an everchanging market terrain.”
Mark Harris, chief executive of mortgage broker SPF Private Clients:
“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 a former RICS residential chairman:
“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.”
Tomer Aboody, director of property lender MT Finance:
“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.”
Mark Tosetti, group partnerships director at Movera:
“These figures are, on the face of it, somewhat disheartening, although a decline is not unexpected for January. However, as transactions are at the end of the homebuying process, they do not necessarily reflect the rest of the market. The latest data from property website Zoopla has shown that buyers and sellers continued to return to the market in February. Looking ahead to next week’s Budget, the last before the next General Election, it will be interesting to see whether the Chancellor gives the market a helping hand such as the hinted-at 99% mortgage, and a boost to housebuilding. Our focus will continue to be on helping those looking to move or remortgage this year.”
Paul Glynn, CEO at Air:
“After a traditionally quieter festive period, a slight rebound in market activity was always to be expected. However, the outlook is not altogether rosy. Property prices are drifting downwards, but as lenders announce new rate increases, many homeowners will need to carefully evaluate their options before seizing the moment to turn their homeowning dreams into a reality.
“The UK property market is resilient, but the current terrain will present many hurdles to even the hardiest of buyers. The high cost of living is still pinching saving pots, and the ongoing media coverage of the UK’s technical recession may well deter some borrowers. For homeowners over the age of 55 looking to lend a financial hand to their relatives, exploring later-life lending could provide some peace of mind. A comprehensive discussion with a professional adviser to evaluate all available and affordable options should be a priority.”
