Property transactions hold up in January - HMRC

The number of UK homes bought and sold jumped in January, government data showed on Tuesday, although there were also signs the market may be starting to cool.

According to figures published by HM Revenue and Customs, the provisional seasonally-adjusted estimate of UK residential transactions in January was 121,640. That was 24.1% higher than January 2020, despite it traditionally being a quiet month for the property market, and the highest January total of the last decade.

The UK housing market has boomed in recent months, fuelled by pent-up demand following the first national lockdown and the Chancellor’s introduction of the stamp duty holiday.

However, despite the large year-on-year increase, the HMRC data also pointed to a possible slowdown ahead of the tax break coming to an end on 31 March.

The number of transactions in January fell 2.4% on December, the first monthly decline since spring 2020, while on a non-seasonally adjusted basis, it slumped 25.2%.

Non-residential transactions also fell, down 3.6% on December and 8.2% year-on-year on a seasonally-adjusted basis.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: "It’s not a surprise that property sales fell off a cliff in January, they always do. But seasonally-adjusted property sales have slumped for the first time since the market was reopened in April last year, which could be a clear sign of things to come.

"The [latest] 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."