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In addition, non-seasonally adjusted residential transactions rose by 18% in May, largely driven by seasonal trends, according to the data from HMRC.

The figures also showed that seasonally adjusted non-residential transactions in May increased by 1% relative to the month prior.

Non-seasonally adjusted non-residential transactions fell by less than 1% relative to April.

Industry reaction:

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The summer is typically a busy period for the industry and it is positive to see that the number of sales is reflecting that.

“A fifth consecutive month-on-month increase confirms that 2024 has so far been a year of recovery.

“While interest rates are still high, competitive mortgage offers are returning to the market and we will see this trend ramp up even further when rates come back to nominal levels.

“There is bound to be some uncertainty among first-time buyers about whether now is the right time to buy, especially as political parties have sought to win over voters by pledging to scale up homebuilding.

“There is also the possibility that the next government would introduce a new help-to-buy scheme which would encourage prospective buyers to start saving. However, if you already have a deposit saved up, now is still a good time to buy, as house prices are stabilising and interest rates are likely to start falling later in the summer.

“Overall, the current state of the property market is robust and is likely to remain that way for the foreseeable future. Fresh buyer incentives would go a long way to allowing that pent up demand to create a more competitive market, but the stability we are seeing is enough for buyers and sellers alike to remain optimistic.”

 

Frances McDonald, director of research at Savills, said: “Completed transactions in May were 17% up on last year, having increased for the fifth consecutive month, on a seasonally adjusted basis. This increase brings them back to within more than 90% their pre-pandemic average for the first time since March 2023.

“More recent lead indicators from TwentyCi suggest a degree of caution from buyers and sellers in the weeks running up to the general election. While agree sales remain 5% higher than the same time last year, this is down the 18% increase seen in May. For the mainstream markets, affordability remains the single biggest driver of demand and with some lenders starting to lower rates in anticipation of a base rate cut, more stability is likely to return to the mortgage markets over the summer.”

 

Kevin Roberts, MD, Legal & General Mortgage Services, said: “The momentum that has been building since the start of the year continued through May, with property transactions rising. This is the latest in a run of positive news for the housing market, after inflation hit the Bank of England’s 2% target in June, for the first time since July 2021. Rightmove suggests confidence in the market is being translated into strong house price growth in some of the relatively less expensive and northerly regions.

“While you may be tempted to hold out on securing a mortgage, and gamble that rates will fall further, many lenders have already priced in cuts. In fact, some major banks have announced rate cuts this week and, rather than rolling the dice, you should seek professional mortgage advice to assess your current options. Advisers have years of experience and industry know-how, as well as access to exclusive products, which can help to navigate you towards the right product at the right time.”

 

Nicky Stevenson, managing director at Fine & Country, remarked: “May’s rise in property transactions signals a positive shift for the housing market, injecting fresh optimism into the sector.

“The increase in transactions, both month-on-month and year-on-year, points to building confidence among consumers.

“This indicates that potential buyers and movers are now actively pursuing their plans rather than adopting a wait-and-see approach.

“Adding fuel to this momentum, inflation has now hit the government’s 2% target. This economic milestone is likely to further boost consumer confidence and market activity.

“A reduction in interest rates would be the next significant milestone in the property market, potentially unleashing pent-up demand. As we head into summer, the Bank of England’s decisions will be crucial.

“Any signs of a rate cut could accelerate the current positive trends and solidify the market’s recovery, making it an exciting time for both buyers and sellers.”

 

Tom Bill, head of UK residential research at Knight Frank, noted, “It’s a slow return to normality for the UK housing market as expectations around a rate cut are pushed into the autumn and a general election adds to the mood of uncertainty. Sales were 8% below the five-year average in May if you take out 2020, which compares to an equivalent decrease of 17% last year so things are moving in the right direction. With the election behind us and the first rate cut since March 2020 imminent or having happened, there should be a more notable seasonal uplift in autumn than spring this year and we expect UK prices to rise by 3% in 2024.”

 

Crispin Harris, director at Jackson-Stops, added: “The swinging pendulum of transaction volumes seen in the years since the pandemic appears to be well and truly over by today’s results. A confident 2% rise in property deals month-month, following five consecutive monthly rises since January, signals a market rooted in stability with hopes of further growth as we move into summer. Whilst pricing remains sensitive, interest rates look compatible with modest capital gains over the coming months. This is reflected in the latest HM Land Registry figures noting a 1.1% annual lift in average house prices in the UK for April.

“Looking at Jackson-Stops’ national branch figures, new instructions in the months of April and May were up 34% year-on-year, with overall sales likewise seeing an uplift of 19%, suggesting the scales of supply and demand are allowing for a more active 2024 regardless of the politics that lay ahead. While it is somewhat unknown what impact a new Government will have, they will be keen to drive momentum, not deflate it, with most economic indicators painting a wider picture of stability, including falling inflation, steady mortgage rates and stable household debt.

“When speaking to agents on the ground, lifestyle changes remain the overwhelming reason to move house for most buyers. As supply increases at this time of year, demand will likely follow. Three and four-bedroom houses are some of the most active parts of the market, often a sweet spot for both downsizers and upsizers and reflected in Land Registry’s figures showing a 2.2% annual price uplift for semi-detached homes: the biggest of all house types. This is also a safe indictor that the mid- to higher-markets will see some stable pricing ahead. For Jackson-Stops, the North West is particularly thriving with prime deals happening quite rapidly in the £5m to £10m range.

“Whilst we won’t see the impact of the election on transaction figures for several months yet, it is likely an interest rate drop will bear more influence on sales volumes and consumer confidence than anything else.”

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