On a non-seasonally adjusted basis, transactions in May 2022 increased to 100,870, which is 1.6% higher than the previous month but 2.0% lower than in May last year, according to HMRC.
Meanwhile, non-residential transactions came to 10,250, representing a 9.7% increase compared to May 2021 and 0.4% higher than in April this year.
On a provisional seasonally adjusted basis, however, HMRC reports residential transactions at 109,210 in May, which is 5.1% lower than in May 2021 but represents a 1.3% increase from April 2022.
In comparison to pre-pandemic levels, the number of property transactions in May 2019 was 96,500 on a seasonally adjusted basis.
Commenting on the latest figures, Quilter mortgage expert Karen Noye says: “While transactions are still higher than pre-pandemic levels, we are slowly returning to some semblance of normality as while we have seen mildly higher numbers in 2022, the number of transactions has breached 100,000 on multiple occasions in the last decade.”
“People have been anticipating a dip in the housing market for months now, with those hoping to get a foot on the ladder holding out for a subsequent fall in house prices.”
“However, so far the major global events we have experienced in recent times have had surprisingly little impact. The housing market has so far defied expectations and transactions and house prices have remained consistently high. However, the cost-of-living crisis will no doubt be its biggest challenge yet.”
Last week the Bank of England (BoE) hiked interest rates to 1.25% as it now predicts inflation to hit more than 11% later this year.
“Soaring inflation, the rising cost of living, high energy bills which are set to increase even further in October and minimal support from the government mean many people are feeling the pressure financially,” Noye explains.
Yesterday the BoE also announced its intention to loosen its mortgage affordability rules from August.
Noye says while the announcement came as a “shock to many given the current circumstances, the change may not be as significant as it sounds as the loan to income (LTI) ‘flow limit’ will not be withdrawn, which has a much greater impact on people’s ability to borrow”.
“Even still, this change could see an uplift in interest in the property market in the shorter term,” she adds.
MT Finance director Joshua Elash says: “It’s impressive that transaction numbers are only marginally down on May last year, a time when stamp duty exemption initiatives encouraged a great deal of activity. This speaks directly to the underlying supply and demand gap which has, and will continue, to drive stability and growth in the market.”
“Equally, if not more interesting, is the fact that transactions in non-residential assets are at the highest May level for nine years as investors continue to seek value in commercial property as that part of the market fully rebounds from the pandemic.”
“The data demonstrates that the market yet again continues to weather the macro-economic storm raging as inflation and the cost-of-living crisis bites in other sectors. The decision by the Bank of England to end mandatory stress-testing will ensure that this trend continues in the months ahead.”
Meanwhile, Canopy chief executive Chris Hutchinson comments: “First-time buyers will be scratching their heads at this, especially those that are struggling to get the necessary funds together for a deposit.”
“With inflation showing no signs of easing, mortgages will continue to get further out of reach and push those with dreams of homeownership out of the market. It is becoming more important than ever to give these people a helping hand, especially by using their current financial habits to give them a boost.”
IMMO director Anna Clare Harper explains: “Housing transactions are important because they drive house prices, which both reflect and affect our confidence, and the economy.”
“These transaction numbers make sense for two reasons: firstly, the desire to buy or sell is lower than this time last year. Secondly, the desire to hold onto property is greater.”
