The total number of residential property transactions in the UK reached 121,640 in January, a 24.1% increase from the total recorded in January 2020, new HMRC figures have revealed.

However, this seasonally adjusted estimate reflected a monthly drop of 2.4% compared to December. HMRC suggested this continued a “historically observed seasonal trend”, where transactions decrease in January following relatively high levels during the financial year’s third quarter.

The provisional non-seasonally adjusted estimate for UK residential transactions in January was 98,830, which was the highest January total since 2007, when transactions reached 114,880.

HMRC said that this was likely due to the continued release of pent-up demand within the property market, alongside the impacts of the stamp duty holiday.

For non-residential transactions, the figures showed the provisional seasonally adjusted estimate for January 2021 was 8,980, a figure 8.2% lower than January 2020, and 3.6% lower than December 2020. The non-seasonally adjusted estimate was 7,680, which was 14.6% lower than January 2020, and 28.0% lower than December 2020.

Hargreaves Lansdown personal finance analyst, Sarah Coles, highlighted that seasonally adjusted property sales had slumped for the first time since the market was reopened in April last year, which could be “a clear sign of things to come”.

“So far in this financial year there have been over 110,000 property sales lost because of the pandemic, and at this rate there’s a strong chance they won’t be made up by April,” Coles commented.

“The fact that seasonally-adjusted sales are falling for the first time since April is a sign of trouble ahead for the market. The RICS survey found the number of sales agreed dropped in January, as buyers and sellers withdrew from the market in the run-up to the end of the stamp duty holiday. This will feed through into the property completion figures through February and March.

“Even after this, there’s little hope for a speedy rebound, because once the stamp duty holiday comes to an end we could reach a full stop for a while. The money involved isn’t always enormously significant considering the immense cost of moving house, but psychologically the tax break was enough to kickstart the market and could be enough to drag it to a dead stop, in the spring months when we’d usually hit peak property sales.”

CEO at specialist short-term lender Hope Capital, Jonathan Sealey, added: “With the clock ticking on the stamp duty holiday deadline, we are now seeing the impact of buyers deciding there simply isn’t enough time to make the purchase before 31 March.

“The Chancellor, Rishi Sunak, will be on his feet next week to deliver a crucial COVID budget and many people in the property sector will be looking for a response to the demand for a review of the deadline. Without which there is a real prospect of this decline continuing, which would undermine the government’s plans for economic recovery.

“The only realistic prospect left for people looking to beat the stamp duty at this point would be through specialist or short-term lending arrangements, where there is greater agility and flexibility.”

Share Story: