Property sales (non-seasonally adjusted) were 100,870 in May – up 1.6% in a month but down 2% in a year. This is still the third busiest May for a decade and is around 4% higher than May 2019. When the figures are seasonally adjusted (to take out the usual seasonal peaks and troughs and reveal underlying patterns), the annual drop is 5.1% and the monthly rise 1.3%.
HMRC published monthly property sales for May: UK monthly property transactions commentary – GOV.UK (www.gov.uk)
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown: “There’s still plenty of life left in the property market, but it’s nowhere near as lively as it was at the peak, and it’s not going to perk up much from here.
“May saw slightly more sales than April, but slightly fewer than a year earlier. This is a world away from the peaks we saw in June last year, when roughly twice as many homes were sold. Over time, we can gradually expect sales to fall back, because we’re increasingly seeing buyers think twice about getting into the market, and last week’s rate rise isn’t going to help.
“The latest RICS residential survey saw new buyer enquiries fall slightly in May, and the agents reported that even those who were house-hunting were incredibly cautious. A toxic combination of runaway inflation, sky-high house prices and another bump in interest rates is starting to take its toll, and some buyers are rethinking whether they can really afford to stretch themselves at the moment. Even if their sums still add up, they’re starting to worry that they could end up over-exposed if everyone else starts pulling back and price rises drop off.
“We expect sales to tail off as we go through the year, but as May’s figures show, it’s not going to be a steady downwards path just yet. There are still plenty of buyers who have been searching for a property for months, so as sellers slowly shuffle onto the market, these long-term hunters will finally find the property they want. It means this particular period of higher sales may well have a reasonably long tail.”