Buyer demand surges as looming tax changes and rate expectations drive market activity
Property transactions in the UK increased in December 2024, driven by buyers rushing to complete purchases ahead of upcoming stamp duty changes.
According to the latest figures from HM Revenue & Customs (HMRC), the seasonally adjusted estimate for residential transactions reached 96,330, up 19% from December 2023 and 3% from November 2024. The non-seasonally adjusted figure stood at 98,120, reflecting a 15% year-over-year rise but a 7% monthly decline.
Non-residential transactions also saw mixed results. Seasonally adjusted transactions totalled 9,850, down 3% annually but up 4% from November. The non-seasonally adjusted figure was 10,450, marking a 3% yearly drop but a 7% monthly increase.
Industry experts attribute the December boost to buyers accelerating purchases before stamp duty changes in March.
“The rise in transactions in December can largely be attributed to the pending stamp duty deadline in March,” said Nick Leeming (pictured left), chairman of Jackson-Stops, commenting on the HMRC property transactions data. “No doubt buyers across London and the South East in particular would have been pushing for deals to get across the line given the traditionally higher tax rates in this part of the country.”
Leeming added that house prices remained stable, with some local markets seeing growth. He pointed to expectations of multiple Bank of England base rate cuts in 2024 and 2025, which could improve affordability. However, slow economic growth and inflation concerns may continue to impact consumer confidence.
“Fundamentally the market remains in a steady position, underpinned by lifestyle and life stages driving sales,” he said. “Though a sustained period of stability, coupled with greater borrowing affordability, should give undecided buyers the confidence they need to renew their searches in 2025.”
Joe Pepper (pictured centre), UK chief executive at PEXA, described the transaction increase as a positive sign, but warned of potential strain on the property market’s infrastructure.
“Against a backdrop of a stagnating economy, December’s uptick in transaction activity is a glimpse of light for the housing market,” Pepper said. “This activity is most likely attributable to buyers hoping to complete their transactions before stamp duty changes in April.”
He expects this pattern to continue as the deadline nears, particularly amid speculation of an interest rate cut. However, he cautioned that the increased transaction volume could overwhelm the conveyancing system, which is already strained by rising remortgage demand.
“This is great for getting the market moving, and good for the economy, but it will also place an inordinate amount of pressure on the infrastructure that sits behind the housing market,” he said.
Phil Lawford (pictured right), national account manager at Saffron for Intermediaries, also welcomed the rise in property transactions, citing market resilience despite economic uncertainty and higher borrowing costs.
“An increase in property transactions at this time of year is a welcome sign, particularly after a challenging period for the housing market,” Lawford said. “Concerns around inflation and a higher interest rate environment have placed pressure on buyers, but the market’s resilience remains evident.”
He also pointed to potential regulatory changes that could improve access to mortgage lending and stressed the importance of mortgage advice in an evolving market.
“While we’re not expecting a return to the historically low rates of the last decade, the prospect of more tailored, accessible lending options could help sustain this positive momentum for buyers,” he said.
“Now more than ever, seeking advice from a professional mortgage adviser is crucial to finding the right product amidst a complex shifting landscape.”
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