According to the latest data released by HMRC, December 2023 was the fourth consecutive month to see a drop in residential property transactions. However, the latest House Price Index from Nationwide suggests homebuyers can be optimistic as prices begin 2024 on a more upbeat note.
The HMRC report evealed the provisional non-seasonally adjusted number of UK residential transactions was 85,820 in December 2023, 2% lower than November 2023 and 20% lower than December 2022. In comparison, the provisional seasonally adjusted number of UK residential transactions in December 2023 was 80,420, 1% lower than November 2023 and down 18% when compared to December 2022.
While both non-seasonally adjusted and seasonally adjusted transaction figures are down month-on-month and year-on-year, this is unsurprising given the time of year, as many movers made the most of the festive period reflecting a return to more seasonal market conditions.
Taking a look at how the market has fared at the start of 2024, Nationwide reports the average UK house price rose by 0.7% from £257,443 in December 2023 to £257,656 in January 2024.
Despite this slight month-on-month increase, recovery was seen in the annual rate of change with prices down 0.2% compared to a year ago, showing encouraging signs for potential movers as mortgage rates also continue to improve and the hope remains that the bank rate will see reductions in the months ahead.
Jason Tebb, President of OnTheMarket, shares his thoughts on these latest announcements from Nationwide and HMRC:
“The housing market has got off to a strong start this year with consistently falling mortgage rates encouraging buyers and sellers to take action.
Despite the market feeling more buoyant with an increase in stock and enquiries, affordability concerns remain an issue following consecutive rate rises last year and the continued high cost of living. This is particularly the case in London and the South East, while nearly half of first-time buyers need to call upon family and friends to help pull together a deposit.
Although mortgage rates are falling, they are higher than many have grown used to in the wake of the pandemic, so buyers remain sensitive on price. Sellers keen to take advantage of the surge in buyer interest must continue to be realistic with regard to their pricing expectations.
While transactions dipped again in December according to the latest residential property transaction statistics released by HMRC, this is unsurprising given the time of year and return to more seasonal market conditions.
What is encouraging is that transaction numbers haven’t fallen off a cliff, as they are regarded as a more useful indicator of the health of the housing market than property prices.
Numerous interest rate rises and the high cost of living have inevitably impacted activity, heightening borrower concerns around affordability. However, the pause in increases, raising hopes that base rate may have peaked and will start falling before long, is supporting buyer confidence.
Mortgage rates continue to edge downwards, giving motivated buyers a further boost. Sellers who price sensibly are finding that there are deals to be done.”
