The number of residential property transactions fell by an annual rate of 20 per cent in December, figures from HMRC have revealed.
The analysis, UK monthly property transactions, found the non-seasonally adjusted estimate of the number of UK residential transactions in December 2023 was 85,820.
This was 20 per cent less than the 107,490 transactions recorded in December 2022 and 2 per cent lower than the transactions in November 2023.
A similar trend was observed among seasonally adjusted transactions as well, with the number reaching 80,420 at the end of last year, an 18 per cent decrease on December 2022 where 97,860 transactions were recorded.
This was also a decrease on a monthly basis, falling by 1 per cent compared with November 2023, and representing the fourth consecutive month-on-month decrease.
Savills director of research, Frances McDonald, said the data highlights a “relative slowdown” in activity in December, pointing out completed transactions ended the year at 1.02mn, 15 per cent below the 2017-2019 average.
She attributed this, in part, to issues with conveyancing systems which “caused some delays”.
However, Shawbrook MD of real estate, Emma Cox, said the slight dip in residential property transactions for December is a "minor speed bump in an otherwise positive start to the year".
Similar optimism was displayed by Legal & General Mortgage Club director, Clare Beardmore, who said: “Despite a slower pace in December, the market received an early gift in the form of a rates war, which has since captured the headlines.”
She attributed this rate war to falling swap rates which has encouraged healthier competition among lenders and led to a decline in average mortgage rates for the fourth consecutive month in December.
Additionally, McDonald also pointed to signs of hope for the market, highlighting that “general improvements in activity” which occurred in the final few months of the year look to have carried forward into 2024.
She explained: “More than 40 per cent of these transactions were to cash buyers, far higher than the average 35 per cent before the pandemic, and reiterates that activity continues to be supported by cash and equity-rich buyers in particular.”
However, she warned that, as mortgage rates continue to ease, the market is expected to rebalance back to debt-dependent buyers.
tom.dunstan@ft.com
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