Strong January for property market

Home sales have had their strongest start to the year since January 2008, official figures showed today.

Some 64,000 homes were sold in the UK in January 2012, figures from HM Revenue and Customs (HMRC) showed, the highest figure for the first month of the year since January 2008, when 79,000 transactions were recorded.

This compares with 52,000 sales in January 2011 and follows reports of a surprisingly high "spring bounce" seen in asking prices this year.

The end to the two-year stamp duty holiday for first-time buyers next month has been a strong influence on recent activity in the market, according to lenders.

Mortgage lending was 10% higher than a year ago in January as those getting their first foot on the property ladder rushed to complete deals, the Council of Mortgage Lenders (CML) reported yesterday.

The CML said its year-on-year figures improved for the sixth month in a row after its members lent £10.5 billion during the month.

It believes the March 24 deadline for the end of the stamp duty-free period for first-time buyers on properties under £250,000 has boosted activity.

Some property websites have also reported "record" searches in January, which they also put down to buyers undertaking more thorough research in the hope of grabbing a winter bargain.

However, the market still experienced its traditional dip at the start of this year and sales were down on the 86,000 recorded in December 2011.

Transactions remain at around half the levels seen before the effects of the financial crisis hit and compare with 115,000 sales recorded in January 2007.

Sale numbers are predicted to remain low this year, with lenders expected to tighten their borrowing conditions for would-be buyers, although it has been suggested that the lack of new homes coming to market will help to keep prices up.

PA