The number of transactions for residential property registered a 10% year-on-year fall in January, new figures published by HMRC have shown.

Residential transactions totalled 68,090 in the opening month of 2024, which was also a 20% drop from the previous month.

HMRC’s monthly estimates are based on its own records as well as those of Revenue Scotland and the Welsh Revenue Authority, for Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) in each of the three nations respectively.

For non-residential property, transactions reached 8,750 in January, which marked an increase of 5% on the same month last year, but a 17% drop compared to the previous month.

Mortgage expert at Quilter, Karen Noye, suggested that the housing market’s stability remains dependent on the Bank of England's interest rate policies.

“If the Bank begins lowering its base rate later this year as expected, it would present a more favourable borrowing landscape,” Noye said. “Such a move would see a reduction in mortgage rates which could pull prospective buyers out of ‘wait and see’ mode and accelerate the housing market’s recovery.

“Reigniting the property market is something the Government is likely exploring ahead its spring Budget next week. Rumours of the return of 99% mortgages could be its attempt to get more first-time buyers into the market which could help boost transactions further up the chain too.”

Chief revenue officer at finova, Chris Little, commented that while activity in the UK housing market has picked up in recent months, “the horizon is not without a cloud or two”.

“As many expected, January did see a slight uptick in transactions, most likely in response to a dip in property prices and the wave of sub-4 % deals that entered the market in early 2024,” Little added. “However, as lenders announce a wave of rate increases in recent weeks, many homeowners will look towards brokers for guidance in a market sandbagged with a highly constricted supply.

“As we approach the spring Budget, the market is rife with discussion on the possibility of a new Government-supported 99% mortgage. It’s difficult to tell whether such a programme will give the first-time buyer market a shot in the arm or exacerbate the ongoing supply problems.”

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