The seasonal estimate of UK residential transactions in October 2023 was 82,910, a 21% drop compared to last year, HMRC has revealed.

In HMRC’s latest property transaction data, the number of transactions was also 3% lower than in September 2023.

The HMRC national statistics provide monthly provisional estimates for residential and non-residential property transactions in the UK and its constituent countries.

These statistics are based upon records by HMRC, Revenue Scotland and the Welsh Revenue Authority (WRA) for Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT), respectively.

Mortgage expert at Quilter, Karen Noye, said: "Though mortgage rates are showing signs of stabilising, they are considerably higher than in previous years and this is putting a real dampener on people’s enthusiasm for moving home or taking their first step onto the property ladder. This stall in transactions shows people are still stuck in ‘wait and see’ mode, likely holding out in the hopes of a dip in house prices and lower mortgage costs.

"The summer months were remarkably subdued, and we can expect the same as we head further into the winter months which could be cause for concern for house prices. Though inflation continues to head in the right direction, the Bank of England is expected to hold rates higher for longer."

Despite the drop in residential transactions, both monthly and yearly, the estimated number of non-residential transactions increased month-on-month by 3%, to 9,930.

HMRC also stated that this figure is “marginally lower” lower than a year previously, at less than 1%.

Chief executive officer at finova, Chris Little, added: "Stubborn inflation threatens to extend the UK’s cost of living crisis into 2024, and budgets are still squeezed as many borrowers have dipped into their savings to make ends meet. Stabilising swap rates do suggest that mortgage rates could eventually be on a steady decline, but this turning point is still a few months away.

"All eyes will now be on the last few months of the year, and whether the data will show the usual end-of-year flurry of activity or a more probable winter slump prompted by affordability concerns."

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