- There were an estimated 98,450 residential property sales in May (seasonally adjusted), up 17% in a year but down 2% in a month (UK monthly property transactions commentary – GOV.UK)
- The annual rise is due to the stamp duty hike in April 2025, which affected sales in May too
- Figures could trend down further amid a drop in mortgage approvals in May
Sarah Coles, head of personal finance at AJ Bell, comments:
“Middle-of-the-road property sales in May are likely to herald a swerve into the slow lane in the coming months.
“The annual rise is due to stamp duty changes a year earlier. In April 2025, the stamp duty holiday ended, so April and May both saw fairly miserable sales levels – which are making this year’s figures look better. The real picture emerges in the monthly figures, with a second consecutive small monthly drop.
“This is still a reasonably robust level of sales: compared to every May for the past decade, it’s bang in the middle of the pack. It’s partly because it reflects sales agreed earlier this year when life was relatively normal. It can take three months or longer between offer and completion, so most of these sales were agreed before the outbreak of the Iran war.
“However, these buyers and sellers who agreed sales before the war started stayed the course throughout the turmoil, which is a positive sign for the market. Anyone hoping to move in the coming months can also take some comfort from the fact that recent weeks have seen mortgage rate cuts, as the peace agreement persuaded the market that inflation wasn’t going to be as much of a problem is it had feared, so interest rates may not rise as far or as fast as previously forecast.
“It could mean some light at the end of the tunnel for buyers and sellers, but they have to work through a fair amount of gloom to get there – which is likely to show up in sales data for the next few months. The Royal Institution of Chartered Surveyors (RICS) data showed agreed sales and buyer numbers continued to fall through March, April and May*, while the latest Bank of England data shows mortgage approvals fell in May – so the outlook isn’t brilliant either**.
“It means buyers are in no rush to take the plunge right now. If you’re in this position, it’s a golden opportunity to consider your savings. Not only will building your savings potentially put you in a better position when you’re buying, but having a robust safety net is essential to get you through the expense of a move, and the inevitable extra costs when you move in somewhere new. If you’re only expecting to hold the extra cash for a short period, you could even consider an account with a very short-term bonus, so you could get more than 5% interest and make the best of the fact your homebuying plans are on hold for a while.
“Those thinking about waiting a while longer to purchase a home could even consider investing their money. This could be through a Stocks and Shares ISA or by using a Lifetime ISA and benefitting from the 25% government bonus on top of contributions up to £4,000 per year.”
