"Despite the affordability constraints of the last year, today’s uptick in transactions tells a resilient story for the market, and the absence of a rate cut clearly hasn’t dampened enthusiasm either."
- Chris Little, chief revenue officer at finova
Seasonally adjusted residential transactions in May shows a fifth consecutive month-on-month increase, rising 2% from 89,160 in April to 91,290 in May, the latest HMRC figures show.
Residential transactions are now 17% higher than in May 2023.
On a non-seasonally adjusted basis, transactions rose by 18% between April and May, which HMRC says is "largely driven by seasonal trends", and by 24% compared to May 2023.
Chris Little, chief revenue officer at finova, commented: “Despite the affordability constraints of the last year, today’s uptick in transactions tells a resilient story for the market, and the absence of a rate cut clearly hasn’t dampened enthusiasm either. Naturally, there still remains a buzz of anticipation for a potential base rate drop this summer, which could entice buyers who’ve been on the sidelines to jump back in. Market certainty following the election should also go some way to boost borrowers’ confidence, turning homebuying into a question of ‘when’, not ‘if’."
Sanjay Gadhia, head of sales at Standard Life Home Finance, said: “The rise in property transactions in May continues the movement in activity we saw in April’s figures. Following inflation returning to the Bank of England’s target of 2%, a long-awaited uptick in activity is beginning to show and the calls to give the go ahead on a cut to the base rate are suddenly that bit louder. Excitement is building for a strong second half of the year for the property market, with a number of major high street lenders moving to cut their fixed-rate deals over the past week. It’s encouraging to see customers purchasing with increased confidence, and confirms that the property market is robust enough to shrug off any uncertainty that may come with an election cycle.”
Maria Harris, chair of the Open Property Data Association, added: “It’s very promising to see that UK residential transactions have bounced back in May after a dip in April. The recent fall in inflation to at last meet the Government’s target is also a reason for optimism and we can dare to hope that the Bank of England might lower interest rates by the Autumn.
“But housing transaction volumes rely heavily on consumer confidence. No matter which party forms the next Government after next week’s General Election, we will continue to deal with a broken housing market unless new ministers tackle this urgently. Top of the list should be digitising our property data and resolving the notoriously sluggish homebuying process. Sharing digital property information across the housing market is a vital first step towards improving customer confidence in the homebuying and moving process and will slash contract exchange times significantly, contributing millions to GDP.”
