The UK property market is increasingly favouring buyers, with residential transactions experiencing a modest decline in May. This trend is providing purchasers with enhanced negotiating power and is instrumental in moderating house price growth, according to the latest figures and industry analysis. Seasonally adjusted data from HMRC revealed 98,450 residential property transactions across the UK in May, marking a 2% decrease from April. However, this figure represents a substantial 17% increase compared to May of the previous year.
This annual rise is largely attributed to unusually subdued activity in April and May of last year, which followed changes to Stamp Duty Land Tax thresholds. Many buyers accelerated their purchases into March last year to meet the deadline, leading to fewer completions in the subsequent months. On a non-seasonally adjusted basis, May saw 92,390 residential transactions, up 7% from April and 13% higher than a year earlier.
Despite the monthly dip, the market continues to demonstrate resilience amidst prevailing economic and political uncertainties. Industry experts suggest that buyers and sellers are largely adapting to the current climate, proceeding with transactions rather than delaying moves. The Bank of England's decision to maintain the base rate for the fourth consecutive meeting, combined with a gradual reduction in mortgage rates, has played a crucial role in bolstering affordability and buyer confidence across the nation.
However, with the supply of properties continuing to outpace demand in numerous regions, buyers find themselves in a robust negotiating position. This market dynamic is actively contributing to the moderation of house price growth, creating more favourable conditions for potential purchasers, particularly first-time buyers. Sellers are, in turn, being encouraged to price their homes more realistically to attract interest.
Tom Bill, head of UK residential research at Knight Frank, highlighted the absence of a typical seasonal bounce in the market, with transactions falling when they would ordinarily rise. He noted that factors such as the Middle East conflict, associated mortgage rate increases, and domestic political uncertainty are dampening demand. Jason Tebb, president of OnTheMarket, reiterated that a strong buyer's market is emerging, which will help keep property prices in check and assist first-time buyers looking to enter the market.
Nick Leeming, chairman of Jackson-Stops, observed an increase in both new listings and buyer viewings throughout May within their network, reflecting growing confidence. While buyers remain selective and negotiations are taking longer, underlying demand persists for appropriately priced homes where sellers are willing to meet market expectations. The greatest momentum is currently seen in family and lifestyle markets, with 'upsizers' driving significant activity as households prioritise space and long-term value.
Source: HMRC, Knight Frank, OnTheMarket, Jackson-Stops