The number of residential property transactions fell to 78,740 in January, down from 105,400 in December, according to HM Revenue & Customs monthly property data.
On a seasonally-adjusted basis, January saw 97,320 transactions compared with December’s 98,710.
The seasonally adjusted estimate for the month decreased by 1.4 per cent, compared with December and by 6 per cent compared with January 2014.
Meanwhile, on the non-residential front, there were 8,630 transactions in January compared with 10,480 in December.
Seasonally-adjusted, the figure was 9,810 in January compared with 9,600 in December.
Danny Waters, chief executive of Enterprise Finance, called it a disappointing start to the year, pointing out that while things look pretty flat on a seasonally adjusted basis, there were actually more than 25,000 fewer completions in January than December.
He said: “With pre-election uncertainty likely to dampen activity in the coming months, we could be set for a subdued couple of months until votes are cast in May.”
Adrian Gill, director of estate agents Your Move and Reeds Rains, said the market is temporarily treading water at the higher end, but fast-moving in areas where price growth has been more modest and where cheaper properties are within reach of new buyers and borrowers who can access Help to Buy.
He noted the London property market has run aground momentarily – a symptom of the unsustainable rate of growth last year.
Mr Gill said: “While a prospective Mansion tax and higher rate of stamp duty on million pound homes may be a blot on the buying landscape at the top end, everyday buyers are simply able to take their time to deliberate and get their finances in order now that market conditions have rationalised again.”
The usual north/south divide has recently reversed, with sluggish growth emanating from London, while the chancellor’s ‘northern powerhouse’ comes true at least in property transaction terms.
Mr Gill commented that northern growth is built on sustained first-time buyer appetite for homes as buyers enjoy the perfect storm of record low mortgage rates, more affordable house prices and lower stamp duty costs.
Separately, research from Clydesdale and Yorkshire Banks showed that confidence in the UK property market has reached a three year high, with 14 per cent said they want to sell their house in the coming year – a figure that jumps to 22 per cent for those in London.
The banks spoke to 1,195 UK homeowners, finding that in 2013, 62 per cent of people said they planned to simply stay in their current home, but a year later this figure dropped to 58 per cent and was down again by a further 17 per cent to 41 per cent in 2015.