Home transactions in December fell 18% to 80,420, compared to a year ago, the latest seasonally adjusted monthly data from HMRC shows.
This figure is also 1% lower than the previous month.
The “significant” slide in December is the fourth monthly fall in a row for housing sales, according to the government department.
The number of UK non-residential deals last month was 10,030, 3% higher than 12 months ago and also 3% higher than last November.
SPF Private Clients chief executive Mark Harris says: “Transaction numbers slipped again in December in the face of higher borrowing costs and the cost of living, as borrowers reassess what they can afford to pay.
“Encouragingly, the direction of travel for new mortgage rates since then has been downwards, with fixed rates looking increasingly attractive.
“However, borrowers do have to accept that they will pay considerably more now than in the heady days of sub-1 per cent mortgages.
“If the Bank of England holds rates again at the next meeting [tomorrow], this will further reinforce the belief that base rate has peaked and the next move will be downwards.”
Hargreaves Lansdown head of personal finance Sarah Coles points out: “The dearth of sales completions reflects the fact that we weren’t far off the August peak in mortgage rates when a lot of these sales were agreed.
“The more positive news is that we have seen significant cuts since, bringing the average two-year fixed-rate mortgage down from around 7% to 5.5%, according to Moneyfacts. Zoopla says this has translated into more agreed sales at the start of 2024.
“However, given it takes three or four months for agreed sales to become completions, it’s going to take some time for this to show in the figures.”
MT Finance director of property lender Tomer Aboody says: “Lower transaction volumes are further proof that some government intervention is needed in order to get the market moving.
“While interest rates are stabilising, leading to lower mortgage pricing, stamp duty is still the biggest outlay for any buyer and therefore, also the biggest obstacle.
“If there was to be some reduction in stamp duty, this would incentivise sellers to finally move and increase the supply of properties coming to market.”
North London estate agent and former Rics residential chairman Jeremy Leaf adds: “Despite recent increases in housing market activity, not surprisingly these figures show a different scenario, mainly reflecting sales from several months ago when decision-making was negatively impacted by high inflation and mortgage rates.
“With these two demons hopefully now in longer-term reverse mode, looking forward we expect transactions to pick up over the next quarter but not substantially.
“Greater choice and continuing caution about the economy mean buyers remain nervous and are still seeking out value.”
