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Home sales slumped in January

Christina Hoghton
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Christina Hoghton

A serious lack of stock is holding back transactions, despite demand remaining high

There were 85,520 UK residential transactions in January 2022, according to HM Revenue & Customs.

That was 12.6% lower than a year earlier in January 2021 and 22.2% lower than December 2021.

However, the number of sales is slightly higher than before the pandemic, in January 2020, when transactions were 83,840.

Andrew Montlake, managing director of mortgage broker, Coreco, explained the reason for the dip. He said: “The Stamp Duty holiday put the market on steroids when it was launched and the tax relief, coupled with an abject lack of stock, explains why January 2022 was down in comparison to the same month last year.

“There are many red flags ahead in 2022, especially with rising interest rates and soaring inflation, but borrowing rates remain exceptionally low and rents are soaring. People are more keen than ever to get out of the rental market and own and that will be a major driver of transactions in 2022.”

Paul Stockwell, chief commercial officer at Gatehouse Bank, added: “Property transactions have settled back to their pre-pandemic levels, and the short supply of homes for sale is likely to hold back any significant growth in sales volumes in the first months of this year.

“Despite the supply problems, there’s still plenty of buyer demand, with would-be buyers queueing up to view properties. Hopefully sellers will start to enter the market in greater numbers in the spring, for what is traditionally a busy period for housing.

“We are still seeing high demand from buyers, despite the wider economic uncertainty from inflation, which points to the strength and resilience of the property market. That said it’s unlikely we’ll see transaction levels in 2022 reach the highs achieved last year.”