Figures from HMRC revealed this was only slightly down on the residential property transactions completed the month before, as there was a 1% dip compared to December.
This indicated a stabilisation in residential transactions following a steep rise in October and a fall in November.
On a non-seasonally adjusted basis, HMRC reported 81,360 residential transactions in January, a 21% annual increase and a 17% monthly fall.
A slow start to the year
Melanie Spencer, sales and growth lead at Target Group, said although transactions were better than last year, the fall in monthly transactions lined up with the “slow and steady start to the year some firms have seen”.
She added: “With transaction times as they are, the rush to beat the stamp duty deadline has already cooled – brokers have done the right thing by properly preparing their customers. Add in fears around inflation and higher interest rates, and we should expect a slight drop in confidence.
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“Of course, much of the market is waiting with bated breath for the spring, where we’ll start to see the real impact of measures announced in the Budget. There’s no doubt this will be felt by households, as will an increase in both water and energy bills, which will continue to push inflation further away from target.
“The need to support the economy will hopefully prevent a too cautious approach from the central bank, meaning further cuts should come. This is key to keeping the market moving and productive – as seen in the annual figures. It’s crucial to alleviating the key affordability challenges felt by so many borrowers. As we have seen already, lenders will continue to do all they can to innovate – whether that’s on product or criteria – and will explore the right partners and integrations to unlock new product offerings and enhance their service offering.”
Andrew Lloyd, managing director at Search Acumen, said the slow start “should not detract from the fact that the recovery in the UK real estate market [that] kicked off last year continues to drive transactions in a positive direction”.
He said against low economic growth and inflation worries, “the start to 2025 is nonetheless seeing a lot of promise in the residential and commercial real estate sectors”.
Lloyd said much of this was due to buyers trying to complete before the stamp duty deadline.
The race against stamp duty
Phil Lawford, national account manager at Saffron for Intermediaries, said it was clear that buyers were not hanging around for the stamp duty changes.
“With SDLT [stamp duty land tax] receipts up 4.95% in January compared to last year, it’s clear that buyers are keen to get ahead of the upcoming changes before the nil-rate threshold drops. We’re also seeing more favourable market conditions, with sub-4% deals available. As more affordable options open, homeownership is starting to feel within reach again for many,” he added.
Lawford said January’s activity displayed the impact of lower mortgage rates.
Chris Little, chief revenue officer at Finova, had a similar view, saying: “Following a much-anticipated cut to the base rate, today’s data is really an echo of an earlier and much less dynamic market. After a turgid 2024, when many aspiring buyers postponed their plans in response to an uncertain political and economic terrain, we are now seeing a widespread release of pent-up demand.”
Mark Harris, chief executive of SPF Private Clients, added: “Transaction numbers have picked up on the back of rate reductions and the appeal of stamp duty savings. The market remains quite tough, but business is picking up as the sun comes out and the weather starts to improve.
“Rate reductions are a great way of boosting confidence and activity in the housing market, as we saw with the base rate cuts in [the] second half of last year and the reduction earlier this month. Further reductions from the Bank of England will help improve confidence and affordability, particularly once the stamp duty concession has been removed.”
