Property sales hit new low in May

The property market had its quietest May for sales excluding the pandemic for at least a decade, HMRC data suggests.

Provisional seasonally-adjusted property transaction figures from the taxman show of the number of UK residential transactions in May 2023 was 80,020, 27% lower than May 2022 and 3% lower than April 2023.

Sales were down 25% annually on a non-seasonally adjusted basis but were 10% higher compared with a month before.

The figures mark the quietest May period for sales since at least 2014 other than during the pandemic in 2020 when there were 46,160 non-seasonally adjusted transactions and 48,920 on a seasonally-adjusted basis.

Commenting on the data, Tom Bill, head of UK residential research at Knight Frank, said: “Volatility in the lending market has led to hesitation among buyers and sellers and while they are playing the guessing game of how much higher the Bank of England will push rates, sentiment will remain weak.

“Buyers find it difficult to plan as budgets get recalculated and there is uncertainty over what happens next to property values, which means sensitivity around asking prices has become acute.

“Transaction volumes will come under growing pressure given how much higher mortgage costs are compared to 18 months ago and we expect a 10% decline in UK house prices, spread over this year and 2024.

“When stability returns, we think demand will prove more resilient than expected given the cushioning effect of strong wage growth, record levels of housing equity, amassed lockdown savings, the availability of longer mortgage terms, forbearance from lenders and the popularity of fixed-rate deals in recent years.”