Search Acumen comments on HMRC’s property transactions data for January 2024

29th February 2024

  • The seasonally adjusted estimate of UK residential transactions in January shows a 2% increase compared to December 2023 – non-seasonally adjusted this figure changes to a 20% decrease compared to the previous month.
  • The seasonally adjusted estimate of UK non-residential (commercial) transactions in January shows a 1% decrease compared to December 2023 – non-seasonally adjusted this figure changes to an 17% decrease compared to the previous month.

Andy Sommerville , Director at Search Acumen, the property data and insight provider, comments:

“The lacklustre transaction numbers today reflect subdued momentum across the board. Whilst commercial property transactions have remained steady, albeit at a snail’s pace with just a 1% decrease month-on-month, it is the residential market that has yet to escape the quicksand, sinking deeper into slow-moving deals. Weak supply and poor financial mobility, exasperated by seasonal lulls, has meant the market is lacking punch and the property plateau persists. Seasonally adjusted residential transactions sit at 82,000 – 10% lower than a year previous, and the lowest recorded volume in January for over a decade.

“For non-residential transactions, although the uptick is modest, compared to January last year we are seeing some stability with a 1% increase. Borrowing costs continue to influence higher value commercial deals, and it is likely that until we see interest rates dial back again, the market will be hard pushed to see significant gains. Some sectors are faring better than others, including tech and Life Sciences, providing a much-needed life raft to the overall picture painted. Government ambitions to make the country a digital superpower has turbocharged this sub-sector while others fall short.  

“Looking ahead, uncertainty still looms, especially with anticipation surrounding potential announcements in the Spring Budget. These announcements are due to add another layer of complexity, with policies potentially impacting both sectors. For example, it has been predicted that the so-called ‘tourist tax’ will not be reversed by the Chancellor, in another hit for the already struggling retail sector, blocking London’s ability to compete with international cities such as Paris or Milan.

“For those stakeholders within the transactions chain, to remain agile and efficient where uncertainty is rife, leveraging technology and innovation has never been more important. Paper chasing alongside endless silos within the process should no longer be a consistent barrier but consigned to history for good. The digitalisation of the entire property transaction process is the key to keeping deals in play and appetite rife, with the ability to accelerate industry growth across the board.”

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