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Property sales rise to 91,000 in May

Property sales rise to 91,000 in May
Shekina Tuahene
Written By:
Posted:
28/06/2024
Updated:
28/06/2024

There were 91,290 residential property transactions completed in May on a seasonally adjusted basis, 17% higher than the year before.

This was also a 2% rise on the number of property sales from the previous month, according to figures from HMRC. 

This was the fifth consecutive month where residential property sales rose and the increase in May was higher than the 10% annual rise recorded in April. 

On a non-seasonally adjusted basis, residential transactions totalled 91,660 in May, 24% higher than last year and 18% up on the previous month. 

An unshakeable housing market 

Ryan McGrath, director of second charge mortgages at Pepper Money, said the annual uptick in completions suggested “buyers have been keen to press on with their property purchases, coupled with greater stock, thanks to the spring bounce, despite the higher-interest-rate environment”.

Ben Waugh, managing director at More2life, added: “The housing market is not prepared to sit still this year. Despite higher interest rates and the general election, which many assumed would prompt a possible lull in activity arising from uncertainty, borrowers are reaching out and seizing the opportunities when they arise. With inflation falling to the Bank of England’s 2% target for the first time in nearly three years, consumers might be feeling less of a squeeze even in the absence of immediate rate cuts. 

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“The market, along with its consumers, is determined to overcome any hurdles. However, when achieving homeownership comes at the cost of long-term financial security, we must pause and reflect. Both first-time buyers and refinancers are increasingly opting for mortgages with 30+ year terms to cope with soaring house prices and underwhelming wage growth. These individuals might be feeling anxious about the prospect of managing mortgage debt in retirement and will need professional advice to help them find sustainable solutions.” 

Kevin Roberts, managing director of Legal and General Mortgage Services, said the momentum that had been building over the year continued in May. 

He added: “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.” 

Hope for housing market gains to continue 

Other industry commentators noted that while activity was improving, there were still potential threats to the health of the housing market. 

Maria Harris, chair of the Open Property Data Association (OPDA), said it was “very promising” to see the rise in residential property sales, but added: “Housing transaction volumes rely heavily on consumer confidence”.

Harris continued: “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.” 

Jeremy Leaf, North London estate agent and a former RICS residential chair, said: “We shouldn’t get too carried away by these figures. Although generally a better indicator of market health than prices, they mainly reflect activity from a few months ago.

“The market has been in stop-start mode since the spring as optimism was replaced by a realisation that interest rates weren’t going to come down anytime soon. This was not helped by the election announcement, which brought added uncertainty.”

He added: “Buyers and sellers are taking encouragement from better economic news including lower inflation and the prospect of reduced mortgage payments. They are not making rash decisions to withdraw or strongly renegotiate, just taking their time.” 

Tomer Aboody, director of MT Finance, said the improvement in transaction numbers showed a willingness to purchase and a positive sign that the market was “moving in the right direction”. 

“However, to really see a significant improvement in transaction numbers will require some stimulus. It will be interesting to see what the new government plans for the housing market, which needs to be driven forwards because it is so vital to the overall health of the economy. 

“While any increase in transactions is positive, much more could be done. Whichever party wins the election has its work cut out as buyers, sellers and lenders all need reassurance and stability alongside proactive policies,” Aboody added.