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Sharp fall in home sales recorded between December and January

Christina Hoghton
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Christina Hoghton

Property transaction numbers have been stable in recent months, but are now starting to decline

The number of UK residential transactions in January 2023 was 96,650, 11% lower than January 2022 and 3% lower than December 2022, according to HM Revenue and Customs.

Those figures are seasonally adjusted to account for variations, but the drop was even more stark based on the raw ‘non-seasonally adjusted’ data. That showed a monthly 27% fall in property sales to hit 77,390 in January.

The government department said that sales of homes have been stable in recent months but are now starting to decline. It added that residential transactions are now similar to pre-coronavirus levels.

Property sales plummet

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Property sales plummeted in January, making it the slowest start to the year in a decade. Buyers packed up and scarpered – spooked by the hike in mortgage rates in the autumn.

“We saw the slowest January in 10 years, as the impact of the mini-Budget fed through into sales figures. And while there’s some lingering optimism that lower mortgages may tempt some buyers back, the heady days of the peak – where at one point we saw more than 214,000 transactions in a month – are well and truly behind us.

“This end of the year is always pretty slow, but this January, property sales moved at a glacial pace, and they’re unlikely to gain much more momentum for some time to come.”

Iain McKenzie, CEO of The Guild of Property Professionals, added: “A dip in transactions is to be expected at this time of the year, following a rush to complete in time for Christmas and avoid the paperwork in January.

“A slowdown in sales isn’t necessarily bad news for agents, as they have time to pause and replenish the stock they have available to buyers.

“It is possible that buyers are adopting a wait-and-see approach to the market with the expectation that house prices will see substantial falls, however the market continues to defy expectation with house prices holding steady for the time being.

“Prospective buyers being hit hard by the cost-of-living crisis may be deciding to sit on their deposit a while longer. As better mortgage deals return to the market and inflation slowly falls to manageable levels again, we should see demand pick up again.”