Residential property transactions fell by a fifth in January compared with the previous month amid shortages in homes for sale, according to official figures.
More than 85,000 properties changed hands last month, the latest figures from the Treasury show. There were 22 per cent fewer transactions than in December and 13 per cent fewer than in January 2021.
However, the figures for the start of the year were 7 per cent higher than the January average for the three years before the pandemic, which was just under 80,000. The supply of homes for sale is thought to be about 10 per cent below the average across 2017 to 2019, according to TwentyCi, the customer intelligence agency.
Lawrence Bowles, director of research at Savills, the estate agent, said that the easing of activity was unsurprising. “Last year’s stamp duty holiday is now a distant memory, and a slowdown in the number of homes listed for sale means it’s looking more and more like a seller’s market,” he added.
The stamp duty holiday, which encouraged buyers by offering a tax break of up to £15,000 on their purchase, ended on September 30 last year.
Bowles said that the lack of stock of homes has pushed up the prices at which sales are agreed. “That imbalance in supply and demand will continue to put upward pressure on values, though rising mortgage rates will impact affordability and ultimately slow potential growth. We’re predicting average UK house prices will rise 3.5 per cent this year and 13.1 per cent by 2026.”
House prices ended last year at a record high with annual price growth of above 10 per cent, its strongest in 15 years. The average price of a home hit £254,822, up by almost £24,000 compared with the previous year, according to Nationwide. In cash terms it is the largest yearly rise on record.