Residential property transactions showed signs of stabilisation at the start of the year with figures from HMRC on Friday revealing that there were 95,110 residential property transactions in January – a 14% increase compared to the same month last year.
Despite this annual growth, transactions dipped slightly by 1% from December, suggesting the market is finding a steady rhythm after recent fluctuations.
The data reflects a period of adjustment following a sharp rise in transactions in October, followed by a decline in November.
On a non-seasonally adjusted basis, HMRC recorded 81,360 residential property transactions in January, showing a robust 21% year-on-year increase, though this was down 17% from December’s figures.
STARTING TO STABILISE
Overall, the latest numbers point to a housing market that is beginning to stabilise after a period of volatility, with annual growth holding firm despite modest monthly variations.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “The market is demonstrating its resilience yet again as these figures reflect buyer and seller activity from a few months ago at least when inflation and mortgage rate uncertainty prevailed.
“They are, of course, also a better indicator of market strength than more volatile house prices.
“Looking forward, we expect more of a settled period over the next few months once the stamp duty concession has ended.”
STAMP DUTY SAVINGS
Jason Tebb, President of OnTheMarket, says: “Steady transaction numbers are encouraging as they are a better indicator of market health than house price fluctuations.
“These figures suggest that buyers have been trying to take advantage of the stamp duty savings to be made by bringing forward purchases to the first quarter of this year.
“Two rate reductions in the second half of last year bolstered buyer and seller confidence, and with one cut already this year – and more expected – there is cautious optimism which bodes well for the spring market.
“With some lenders reducing their fixed-rate mortgages, helping ease affordability, increased stock means buyers have more choice so are in a stronger negotiating position and remain price sensitive.”
KEY INDICATOR
Amy Reynolds, Head of Sales at Richmond estate agency Antony Roberts, says: “These figures offer valuable insight into overall activity and are a key indicator as to how the market is likely to shape up in the first half of the year.
“Steady transaction volumes show that higher borrowing costs and affordability pressures are impacting buyers, preventing the market from running away with itself.
“We found that early January was quiet but the month as a whole turned out to be busier than usual with a good number of market appraisals, which bodes well for a strong spring market.
“In areas where stock is limited, demand has remained steady, particularly the family home market with work-from-home potential. Homes that are well priced and well presented are still selling relatively quickly; while buyers may pause to assess financial implications, high-demand areas are likely to retain interest.”
ENCOURAGING UNDERPINNING
Nathan Emerson, Chief Executive of Propertymark, says: “Upcoming threshold changes regarding stamp duty for those buying in England and Northern Ireland will no doubt have had people aiming to complete with a higher degree of urgency than normal on their new home before the April deadline.
“Overall, the figures represent an encouraging underpinning for the housing sector as we head further into 2025, with a strong uplift in housing transactions year on year and with interest rates sitting markedly lower than twelve months back, there is a solid base for growth as the year progresses.
“However, there are still challenges to overcome and we are keen to see government home building plans from across all corners of the UK implemented to help ease housing shortages and make housing more affordable in the long-term across many regions.”
TRANSACTIONS EXPTECTED TO RISE
Richard Donnell, Executive Director at Zoopla, says: “Property transactions have rebounded on increased market activity and a return to house price growth over 2024. This momentum is spilling over into 2025 as shown by the latest transactions data for January 2025 up 23% on 2024.
“Property transactions will continue to increase as Zoopla’s leading indicators of market activity are 10 to 11% higher than a year ago.
“Residential transactions are expected to be 5% higher over 2025 reaching 1.15m.
“There is an extra surge of sales working their way through the pipeline as buyers rush to beat the stamp duty deadline in a months time with extra pressure on the conveyancing industry to deliver for home buyers.”
ACTIVITY REMAINS STRONG
Iain McKenzie, Chief Executive of The Guild of Property Professionals, says: “The property market started 2025 on a strong note, with January’s year-on-year increase in transactions reflecting the momentum carried over from late 2024.
“The upcoming stamp duty changes in March have encouraged many buyers to act sooner, adding to the early-year surge in activity.
“With February and March historically being the best months to list a home, and data showing they lead to the highest completion rates, sellers have a prime opportunity to capitalise on heightened demand.
“Additionally, while higher-than-expected inflation may pump the brakes on the pace of interest rate cuts, expectations of lower rates later this year should further support buyer confidence.
“Despite mortgage rates staying relatively high, sales activity remains strong, and with moderate price growth projected throughout 2025, particularly in areas with untapped potential, the outlook for the market remains positive.”
ENCOURAGING START
Gareth Samples, Chief Executive of The Property Franchise Group, comments: “Despite certain headwinds, the property market has had an encouraging start to the year in terms of buyer activity.
“The momentum in sales seen at the end of last year has continued into the early stages of this year, even with mortgage rates remaining relatively high.
““So far this year, the number of potential buyers contacting agents about homes for sale is 8% higher than last year, while the number of sales being agreed is up by 15%.
“History has shown that key deadlines – such as the end of a Stamp Duty holiday or, in this case, a threshold change – often drive increased activity as buyers look to save on costs. While there may be some tempering in demand after the deadline, we hope to see renewed energy in the market as we head into spring.
“The lighter, brighter days improve a home’s kerb appeal, and research shows that if you list in spring, you are more likely to find a buyer faster than any other time of the of year. Over the past three years, 27% of all sales have taken place in spring – the highest of any season.”
HEIGHTENED DEMAND
David Johnson, Managing Director of property consultancy INHOUS, says: “January’s property market was driven by two buyer demographics in particular.
“First-time buyers rushing to beat the looming changes to stamp duty thresholds and, on the other spectrum of the market, high-net-worth-individuals and property investors who revaluated the UK property market following Rachel Reeve’s plans to soften her previously announced non-dom tax changes.
“The heightened demand has contributed to more competitive market conditions for house hunters and the majority of properties holding their value, however, buyers should not shy away from entering price negotiations.”
TOUGH MARKET
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “Transaction numbers have picked up on the back of rate reductions and the appeal of stamp duty savings.
“The market remains quite tough but business is picking up as the sun comes out and the weather starts to improve.
“Rate reductions are a great way of boosting confidence and activity in the housing market, as we saw with the base rate cuts in second half of last year and the reduction earlier this month.
“Further reductions from the Bank of England will help improve confidence and affordability, particularly once the stamp duty concession has been removed.”
POSITIVE FEW MONTHS
Tomer Aboody, director of MT Finance, said: “Although we have seen slightly lower transaction volumes in January compared to December, these numbers are marginal and reflect the typical new year sentiment in buyers.
“Overall, it has been a positive few months for the housing market with transaction levels growing stronger, although still significantly lower than pre-pandemic levels.
“This subdued activity illustrates how big an impact higher interest rates have on the market.
“As buyers look to the Bank of England for further rate reductions, any assistance here will help the upwards trajectory in transaction numbers as the year progresses.”
