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House sales have surged for the fifth consecutive month in May, with HM Revenue and Customs (HMRC) figures revealing a robust 17 percent increase compared to the same month last year and a two percent rise from April 2024.
The UK saw an estimated 91,290 property transactions in May, signalling a steady climb from May 2023’s figures and surpassing April 2024’s numbers.
HMRC highlighted the positive trend, stating: “Provisional figures for May 2024 showed a fifth consecutive month-on-month increase in seasonally-adjusted transactions.”
In a comparison of the spring months, there were 180,450 house sales over April and May this year, which is a notable jump from the 160,530 transactions recorded a year prior.
Tom Bill, Knight Frank’s head of UK residential research, commented on the data, suggesting that “a slow return to normality for the UK housing market as expectations around a rate cut are pushed into the autumn and a General Election adds to the mood of uncertainty”.
Meanwhile, property experts at Zoopla have forecasted a subdued house price inflation, predicting it to lag behind household income growth over the next couple of years.
Zoopla has calculated that the average house price currently exceeds what would be affordable for typical households by almost £20,000, but they anticipate this gap will close by year-end due to rising incomes and the increasing prevalence of longer mortgage terms.
In other economic news, the Consumer Prices Index (CPI) inflation rate dipped to two percent in May, down from 2.3 percent in April, as reported by the latest figures from the Office for National Statistics (ONS).
The Consumer Price Index inflation hit the target of two percent in July 2021, but then saw a marked increase to an unforeseen 41-year high of 11.1 percent in October 2022.
Crispin Harris, Director at Jackson-Stops, discussed their estate agency’s data: “New instructions in the months of April and May were up 34 percent year-on-year, with overall sales likewise seeing an uplift of 19 percent, suggesting the scales of supply and demand are allowing for a more active 2024 regardless of the politics that lay ahead.”
Shawbrook Bank’s MD of real estate, Emma Cox, shared: “Residential property transactions have continued on their upward trajectory in May, according to the latest figures from HMRC.”
“After five consecutive months of growth, confidence within the market appears to be returning, helped by the increasingly favourable macroeconomic outlook.”
“Prospective buyers and investors are adapting to higher fixed-rate mortgage rates and continuing to transact.”
However, the chief executive of mortgage broker SPF Private Clients, Mark Harris, stated: “Several lenders have reduced fixed-rate mortgages for borrowers taking out new deals on the back of cheaper funding rates, which is encouraging and hopefully a sign of better things to come.”
“But until the Bank of England starts cutting interest rates, these reductions are unlikely to become more sustained.”
Amy Reynolds, who is the head of sales at London estate agents Antony Roberts, commented: “While property prices have fallen in some areas, it is still very difficult for first-time buyers.”
She further added: “With higher borrowing costs, home ownership is out of reach for many.”
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