Seasonally adjusted residential transactions for the month of May have shown a fifth consecutive month-on-month increase, rising 2% from 89,160 in April to 91,290, HMRC has revealed.
In addition, non-seasonally adjusted residential transactions rose by 18% in May, largely driven by seasonal trends.
The data also revealed that seasonally adjusted non-residential transactions in May increased by 1% relative to the month prior.
Non-seasonally adjusted non-residential transactions decreased by less than 1% relative to April.
Reaction:
Chris Little, chief revenue officer, finova:
“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 side lines 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’.
“As competition heats up with expected rate drops this summer, lenders must harness technology to streamline property transactions.
“Borrowers now demand seamless services, not to jump through hoops with outdated legacy systems.
“Embracing dynamic pricing engines early will give lenders a competitive edge, simplify new product launches, and elevate the experience for borrowers, savers, and brokers.”
Sanjay Gadhia, head of sales at Standard Life Home Finance:
“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.”
Nathan Emerson, CEO at Propertymark:
“Since the start of the year, the housing market has seen a much-anticipated traction return and it’s extremely positive to see a trend of growth finally emerging again.
“Now that inflation is down within the initially targeted range, over the coming months we are optimistic to see a cut in base rates from the Bank of England.
“When this does happen, it will help reinforce further progression and bring a more consistent marketplace.”
Phil Lawford, national account manager at Saffron for Intermediaries:
“Today’s figures reflect renewed consumer confidence in a resilient mortgage market. Inflation has now hit the Bank of England’s 2% target, and borrowers are eagerly awaiting a base rate cut which could see mortgage rates fall further.
“That being said, the exact timeline on a rate cut is unclear, and those looking to buy a home should consider the options currently in front of them rather than trying to game a market that can change very quickly.
“Meanwhile, all eyes are on the election which among other things, will partly define the course that the housing industry sets on over the next five-years.
“Whatever the result, the next government needs to think beyond the next electoral-term and work on a strategy that will set the industry up for a sustainable and healthy future in the long-term.
“While there is a lot to be positive about, the market continues to move at pace, and so it is always essential for borrowers speak to a professional financial adviser who can help them navigate the range of options available at this time.”
Andrew Lloyd, managing director at Search Acumen:
“The uptick in commercial property transactions for May is a welcome sign of resilience in the real estate sector, demonstrating that the looming General Election has not yet deterred investors against a wider economic picture of stability.
“This positive result after a downward swing in commercial real estate investment in the first quarter of the year could signal a turning point for the industry, potentially ushering in a more dynamic period for both residential and commercial sectors alike.
“Whilst we must rightfully underscore gains in an uncertain market, cautious optimism remains the most sensible takeaway of today’s results.
“It is positive to see investors focus on the fundamental strengths of prime assets and emerging opportunities in sectors such as technology and life sciences.
“This selective approach to investment highlights the importance of detailed, reliable property data in informing strategic decisions and supporting faster deals.
“However, it will remain challenging to predict the bigger impact of the General Election on investors more broadly, as the wheel of fortune also lies in the hands of the Bank of England for a long-awaited interest rate reduction to stimulate growth.
“Looking ahead, whilst challenges persist, there is a sense of ‘steady as she goes’ that is keeping momentum moving.
“For those of us in the property data and search sector, this reinforces the need to continue to innovate and provide the tools for lawyers and investors to act swiftly and confidently, moving deals ahead at full steam to help navigate market sensitivities.”
Crispin Harris, director at Jackson-Stops:
“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.”
Kevin Roberts, managing director, Legal & General Mortgage Services:
“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.”
Maria Harris, chair of the Open Property Data Association:
“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.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“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.”
Nicky Stevenson, managing director at national estate agent group Fine & Country:
“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.”
Karl Wilkinson, CEO at Access Financial Services:
“This month’s residential transaction figures are a great improvement on last month’s and extremely encouraging for the industry.
“For example, last month’s non-seasonally adjusted estimate of UK residential transactions for April 2024 were 9% lower than the previous month. May 2024 figures, however, are 18% higher than April 2024 and a massive 24% higher than May 2023.
“It appears that consumers have come to terms with the fact that we’re unlikely to see significant drops in interest rates any time soon.”
