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HMRC: transactions in December down by 18%

ended 31. January 2024

HMRC have this morning announced that “December showed the fourth consecutive month-on-month fall in residential transactions, with non-seasonally and seasonally adjusted transactions down by 2% and 1% respectively. Residential transactions remain signficantly below December 2022, with seasonally adjusted transactions down by 18% relative to 12 months prior.” Main points below. Newspage asked property experts for their views, bottom.

  • the provisional non-seasonally adjusted estimate of the number of UK residential transactions in December 2023 is 85,820, 20% lower than December 2022 and 2% lower than November 2023
  • the provisional seasonally adjusted estimate of the number of UK residential transactions in December 2023 is 80,420, 18% lower than December 2022 and 1% lower than November 2023

16 responses from the Newspage community

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Ben Perks
Managing Director at Orchard Financial Advisers
The drop in transactions by nearly a fifth in December is a clear sign that confidence in the market was low during 2023, with higher mortgage costs deterring buyers. Many borrowers are waiting to see what happens and are not keen to jump at the rates on offer currently. Hopefully the Bank of England will choose to hold at 5.25% this week, which will help to provide stability and improve confidence. This should help the overall trajectory of rates and, as they get more competitive, and borrowers get used to the 'new norm', transactions should rise. The recalibration to the new rate environment has started but still has some way to go.
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Rohit Kohli
Director at The Mortgage Stop
These numbers aren't a surprise as transactions were very slow in the second half of 2023. What happens next is now key. January has already surpassed where we were in 2023 and confidence from buyers is improving, albeit still a little fragile. We should see an uptick in transactions this quarter. What the Bank of England does tomorrow and what giveaways the Chancellor anounces in March to try to win the election will be key drivers of transaction levels in 2024.
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Darryl Dhoffer
Founder at The Mortgage Geezer
These figures aren't great but equally don't come as much of a surprise. Higher mortgage rates in 2023 dampened buyer demand and affordability. On top of that, following a period of rapid price growth, the market underwent a natural correction in prices. 2023 could be defined as a cautious UK housing market. Any market recovery in 2024 hinges on interest rate stability, or better still cuts, and broader economic improvement. Yesterday's insolvency data shows the knife edge the economy is on.
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Gareth Davies
Director at South Coast Mortgage Services
These figures aren't a shock to anyone in the industry. December 2022 completions wouldn't have been hugely impacted by the Truss debacle, as many would have been set up way before the markets went south, and would've been in the final stages when it all kicked off. 2023 saw many borrowers take stock and re-assess their desire to move and rightly so. However, in the tail end of 2023 and certainly so far in 2024, we have seen a huge uplift in people looking to return to the market and move house. Confidence is without question returning so take these figures with a pinch of salt.
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Graham Cox
Director at Bridging Hub
Transaction levels down about a fifth in December compared to December 2022 reveals the extent to which high mortgage rates have reduced buyer demand. This year, we're likely to see an increase in supply as homeowners with unaffordable mortgages look to downsize or rent, and potentially more buyers too, as mortgage rates fall. I expect house prices to fall about 5% this year, possibly more if the UK falls into recession.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
These poor figures come as no surprise given how sluggish 2023 was after the disastrous mini-Budget and what it did to mortgage rates. With mortgage rates soaring and consumer confidence severely knocked, many elected to wait and ride out the storm, which is reflected in the drop in transaction levels. These figures don't reflect the current market, though, where house buying activity is bouncing back and those who've previously stalled are reapproaching the market.
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Michelle Lawson
Director at Lawson Financial
These figures were always on the cards given the higher interest rate environment we're now in and also the higher Stamp Duty for buy-to-let investors. A Stamp Duty give-away should be a serious consideration for the March Budget to get the property market back up and running. The property industry supports so many other businesses that the knock-on effect is truly being felt. Transaction numbers are getting better but a real Budget boost could be a win for the economy.
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Andrew Montlake
Managing Director at Coreco
Transactions in December were noticeably down as many prospective buyers preferred to continue to adopt a wait-and-see approach until the new year. This has played out as January has seen a strong start in the levels of new enquiries for both estate agents and mortgage brokers, as buyers and sellers look to finally make that move that they may have put on hold for some time now. They have been stirred into action by softer prices and easing mortgage rates, knowing that given a continued lack of supply, prices look set to recover over the year as the uptick of demand continues. The housing market thrives on sentiment, and these latest figures showing market resilience will help to instill confidence in buyers and sellers alike, which should translate into higher transaction numbers as the year progresses. It is often all about timing, and a growing number of people believe that 2024 could just be the best time to buy in a while.
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Justin Moy
Managing Director at EHF Mortgages
It is no suprise that transactions have been lower in 2023. The appeal of buying only started to return right at the end of the year as mortgage rates improved. There is a time lag on this data, and these figures may not reflect the volume of Product Transfers that have been reserved behind the scenes. The start to 2024 has certainly been more positive, applications have been more in favour of purchases than remortgages, and the mood is more robust, too.
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Imran Hussain
Director at Harmony Financial Services
This should come as no surprise to anyone. Following Trussonomics, the sh!t really hit the fan and rates went up like a rocket. Confidence was knocked and it simply meant 2023 was a muted year for residential property transactions. Right now, though, the market is picking up slowly and confidence is returning as interest rates seem to be stabilising.
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Ken James
Director at Contractor Mortgage Services
You mean to say that with High interest rates and clients concern about the cost of lending the figures are down on previous years .. shocker
2024 however has seen the resurgence of interest, I feel that if the Bank of England hold and inflation figures do not sky rocket this year should see a swell of interest and we should have a more productive year ahead.
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Jonathan Gordon
Director of Wealth Management at IP Global
You have to take into account the time lag in this data and that it reflects a time when confidence in bricks and mortar was not great. However, January already shows signs of a market-wide pick-up with a 0.7% rise in UK house prices and a lot more demand. Although a dramatic resurgence this year seems unlikely, the overall outlook is improving. The latest RICS survey reveals both stable buyer enquiries and early indications of increased property listings.
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Peter Stamford
Mortgage Expert at Stamford Home Finance
Residential transactions have experienced another decline, marking the fourth consecutive month of this trend. 2023 was the year of uncertainty and that's reflected in this data. Tomorrow, the Bank of England will announce its base rate decision, which is widely anticipated to remain at 5.25%. When a rate cut does come, that could trigger greater transactions volumes.
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Richard Jennings CeMAP
Founder & Managing Director at Richard Jennings Mortgage Services
Whilst a 1% drop in transaction levels for seasonally adjusted transactions is nothing to cause any major concerns, a drop of 18% compared to December 2022 definitely shows the weakness of sentiment surrounding property in 2023. To lose almost a fifth of housing transactions is a clear indicator that people are still cautious of moving, either to commit to a first home or second steppers moving into a larger family home. This is understandable given the strains on finances from all other aspects of living, poor wage growth and increased interest rates. We keep seeing indicators that the economy is struggling in all aspects but as yet we are to see a clear plan from the Government to increase consumer confidence, provide a plan to ease the financial burden on consumers and deliver real growth to the UK housing market.
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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
Higher interest rates from the first to the third quarter of 2023 are likely to have significantly influenced the reduction in property transactions witnessed in the final months of the year. This trend suggests that potential buyers have been hesitant to commit to purchasing new homes or moving, deterred by the prospect of taking on costly mortgage debts. However, the consistent decrease in mortgage rates throughout the last quarter of 2023 presents an intriguing scenario. Should this lead to a resurgence in property transactions from January to March, it would hardly come as a surprise. This potential turnaround warrants close observation, as it could signal a pivotal shift in market dynamics.
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Amit Patel
Adviser at Trinity Finance
What happens now and over the course of the year will be interesting. Will the Bank of England hold rates tomorrow? I think we can safely say yes. Will Jeremy Hunt announce a wave of tax giveaways to intice the electorate to vote for the Conservatives at the next general election? Most likely. There is plenty to look forward to in the property market in 2024 contrary to what many people are led to believe. All the doom and gloom of the past 18 months is now behind us.