HMRC: Property sales are falling

The level of property sales in the UK is declining, HMRC has suggested, after it revealed that transactions dipped for the second consecutive month in January.

The latest property transactions data from the taxman has recorded 77,390 sales in January 2023 on a non-seasonally adjusted basis, down 7% annually and 27% lower than December 2022.

On a seasonally-adjusted basis, there were 96,650 sales, down 11% annually and a 3% decline on the previous month.

HMRC said: “UK residential transactions have generally been stable in recent months but we are now starting to see a decline in numbers. 

“Residential transactions are similar to pre-coronavirus levels, for example the provisional seasonally adjusted estimate in January 2023 is 96,650 compared to 97,310 in January 2020.”

It comes after HMRC recorded a non-seasonally adjusted figure of 108,960 sales in December, down 1% annually and 3% on a monthly basis.

Agents and commentators remained upbeat despite the declining figures.

Nick Leeming, chairman of Jackson-Stops, said: “Overall, these figures indicate that transaction volumes are steadying across the board, on par with volumes seen pre-pandemic, signalling an end to the days of erratic swings in completions. 

“The past two years have been marked by policy changes, economic volatility, and unserviceable levels of buyer demand, where now the market appears to be finding its balance. House prices are also finding their new balance, which has given broader opportunities to would-be buyers, and will be key to keeping transactions buoyed in the coming months.”

Lucian Cook, head of residential research at Savills, added: “While 7% below the same month last year, the housing transaction numbers from the HMRC remain surprisingly robust. 

“The turmoil we saw in the mortgage markets in the last three months of 2022 are yet to fully feed through into sales completions. 

“Nonetheless given what has happened to mortgage approvals, the numbers still point to a market where equity rich and cash buyers have the upper hand, while first time buyers and mortgaged buy to let investors bear the brunt of higher mortgage costs.”

Jason Tebb, chief executive of OnTheMarket, said buyer and seller confidence seems to be holding up “remarkably well,” which he said may be partly down to the “clear direction that the Government and Bank of England have set out in terms of dealing with inflation and its impact on interest rates.”

He added: “The upheaval of September and October has given way to increased calmness, with inflation looking as though it may have peaked. Interest rates may have a little higher to go but the markets are also suggesting they may be close to their peak, if not there already.

“As the market adjusts to something closer to what it looked like pre-pandemic, all this underlines the importance of sellers pricing their homes correctly. People need to move for different reasons, and that isn’t going to change even if conditions are tougher, but properties must be priced correctly now more than ever.”