Industry reacts to current market trends
The number of residential property transactions in the UK surged by 17% year-on-year in May, reaching 91,290, according to data from HM Revenue and Customs (HMRC).
The figure also marked a 2% increase from April, following a 9% drop between March and April. The non-residential sector also saw growth, with transactions rising by 6% year-on-year and 1% month-on-month, totalling 10,130.
Charlotte Nixon (pictured left), a mortgage expert at Quilter, noted that the market appears to be rebounding from a subdued period, with transaction numbers now aligning with pre-pandemic levels.
“The number of property transactions appears to have returned to a more ‘normal’ level and is now roughly in line with pre-pandemic figures,” she said. “May 2024 saw a rise to 91,660 property transactions, which is not far off the 96,120 seen in May 2019.”
She also highlighted potential positive developments for buyers, as major lenders like HSBC, Barclays, and NatWest have recently reduced mortgage rates. These moves come in anticipation of a possible interest rate cut by the Bank of England, which could boost consumer confidence.
The housing market has also become a focal point for political pledges in the lead-up to the general election. The Labour Party has committed to building 1.5 million homes over five years if elected, while the Conservatives have promised to abolish stamp duty for first-time buyers on properties up to £425,000 and introduce a new Help to Buy scheme.
Crispin Harris, director at Jackson-Stops, described the current market as stable, citing a 2% monthly rise in property transactions since January. “Interest rates look compatible with modest capital gains over the coming months,” he remarked. He noted the HM Land Registry reported a 1.1% annual increase in average house prices for April, with semi-detached homes seeing the most significant rise at 2.2%.
The spring bounce, a seasonal increase in housing market activity, has contributed to the growth in transactions. Ryan McGrath (pictured centre), director of second charge mortgages at Pepper Money, mentioned that buyers had been motivated by the greater availability of properties despite higher interest rates. He noted that many homeowners are considering renovations, using second charge loans to fund improvements as an alternative to moving.
Meanwhile, Ben Waugh (pictured right), managing director at more2life, highlighted the resilience of the market despite economic challenges. “Borrowers are reaching out and seizing the opportunities when they arise. With inflation falling to the Bank of England’s 2% target for the first time in nearly three years, consumers might be feeling less of a squeeze even in the absence of immediate rate cuts,” he said. However, he cautioned that long mortgage terms could impact financial security in retirement, emphasising the need for professional advice.
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