The number of transactions last year dropped to 1.22m – a minor 0.8 per cent drop on the year before and the lowest total since 2014 according to HM Revenue and Customs.
In December alone, the number of homes bought and sold fell 3.9 per cent to 99,100, its lowest monthly figure since November 2016.
In response to the figures, analysts at Jefferies say 2018 is likely to remain relatively static, too. “Overall, transactions were broadly flat, declining just 0.8 per cent in the year… transactions will continue to trend broadly flat from here, with new build taking share” they say.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, broadly agrees, saying: “These figures bear out what we have been seeing – steady, not rising or falling activity, particularly in the lead-up to the traditionally quieter Christmas period.”
He believes the market has started 2018 a little more strongly with evidence of pent-up demand from some cautious buyers, although he is uncertain whether that will extend into the spring.
Meanwhile credit rating firm Fitch Ratings says prices in London and the south east of England are likely to drop in 2018.
The agency says this is down to high house prices, low or no wage growth and political uncertainty thanks to Brexit. For the UK as a whole, prices will remain unchanged it says.
“Whilst prices will be supported somewhat by the housing shortage, we expect already-stretched affordability to weigh further on house prices, as income growth will remain muted. High inflation will also reduce disposable income further. This forecast is based on an assumed orderly outcome for the country’s new relationship with the EU” says a Fitch report.
The UK is one of only three countries in the 22 analysed by Fitch which the agency says will not enjoy price growth over the next 12 months.
The only countries where domestic housing markets may fare more badly are Greece, with a forecast two per cent price drop, and Norway where values could drop five per cent.