Residential property transactions showed signs of stabilisation at the start of the year with figures from HMRC 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.

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.

MARKET IS FLUSH

Clare Beardmore, director of distribution and mortgage club, L&G Mortgage Services, said: “Although today’s figures show a slight dip in property transactions month-on-month, we must not overlook the positives.

“The market is flush with over 5,000 mortgage products, and so UK buyers have access to a range of tailored options. Momentum is up, and with over 550,000 homes currently in the completion process – up 25% from last year – the stage is set for a busier market in the immediate future.”

STAMP DUTY SAVINGS

Mark Harris, chief executive of SPF Private Clients, said: “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.”

SUBDUED ACTIVITY

And 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.”

BETTER DEALS ON THE WAY

Phil Lawford, national account manager, Saffron for Intermediaries, said: “The first figures for 2025 are in, and it’s clear that buyers aren’t hanging around for April’s stamp duty changes.

“With SDLT receipts up 4.95% in January compared to last year, it’s clear that buyers are keen to get ahead of the upcoming changes before the nil-rate threshold drops.

“We’re also seeing more favourable market conditions, with sub-4% deals available. As more affordable options open, homeownership is starting to feel within reach again for many.

“These latest figures predate the impact of lower mortgage rates, but we can already see the effect of better deals on the horizon.”

ONGOING UNCERTAINTY

Richard Pike, chief sales and marketing officer at Phoebus Software, said: “The property market continues to show signs of volatility, with transactions stabilising after a rollercoaster few months.

“While the slight dip in seasonally adjusted residential transactions suggests a degree of resilience, the sharp drop in non-seasonally adjusted figures highlights the ongoing uncertainty.

“However, it’s important to note residential transactions are still up considerably on this time last year.

“Despite interest rate cuts aimed at stimulating the market, rising inflation is likely tempering buyer confidence and affordability.

“With economic pressures pulling in different directions, the next few months will be crucial in determining whether stability holds or further fluctuations lie ahead.

“The changes to stamp duty at the start of April are also likely to create short-term volatility, as buyers bring forward their purchases to beat that deadline.

We may see a surge in transactions in March, followed by a slowdown in subsequent months, mirroring patterns seen after previous tax adjustments.”

BOOST INNOVATION

Chris Little, chief revenue officer, finova, said: “Following a much-anticipated cut to the base rate, today’s data is really an echo of an earlier and much less dynamic market.

“After a turgid 2024 when many aspiring buyers postponed their plans in response to an uncertain political and economic terrain, we are now seeing a widespread release of pent-up demand. In fact, EY ITEM Club Outlook has only recently predicted that UK mortgage lending will double in 2025 – and all the evidence suggests we are on the right track, even if it hasn’t translated into the data quite yet.

 “Nevertheless, the current climate is not without its challenges. Borrowing costs are still higher than a few years ago, and buyers with irregular forms of income, such as those who are self-employed, still struggle to pass traditional affordability tests.

“In the current market, product innovation needs a boost. Lenders that focus on inclusivity and continue developing their offering by listening to feedback from brokers and borrowers will have the edge to succeed this year.”

ENCOURAGING SIGNS

And Nathan Emerson, chief executive of Propertymark, added: “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.”