House sales rise for fifth month in a row as market 'slowly returns to normal'

The number of house price sales increased by 17% compared to May 2023

House sales have surged for the fifth consecutive month in May, with HM Revenue and Customs (HMRC) figures revealing an estimated 91,290 transactions.

This marks a 17% increase compared to May 2023 and is 2% up from April 2024's figures. HMRC highlighted the trend, stating: "Provisional figures for May 2024 showed a fifth consecutive month-on-month increase in seasonally-adjusted transactions." In the months of April and May this year, there were 180,450 property deals, which is significantly higher than the 160,530 recorded during the same period last year.

Tom Bill, head of UK residential research at Knight Frank, 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 earlier this week predicted that house price growth will likely be subdued, expecting it to lag behind household income increases over the next couple of years. Zoopla has calculated that the average house price currently stands nearly £20,000 above what would typically be affordable for households. However, they anticipate this gap will close by the end of the year due to rising incomes and the growing popularity of longer mortgage terms.

The Consumer Prices Index (CPI) inflation also saw a decrease to 2% in May, down from 2.3% in April, as per the latest stats from the Office for National Statistics (ONS). CPI inflation last hit the 2% target back in July 2021, before skyrocketing to a 41-year high of 11.1% in October 2022.

Crispin Harris, director at Jackson-Stops, said: "New instructions in the months of April and May were up 34% year-on-year, with overall sales likewise seeing an uplift of 19%, suggesting the scales of supply and demand are allowing for a more active 2024 regardless of the politics that lay ahead."

Emma Cox, MD of real estate at Shawbrook bank, added: "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."

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "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, head of sales at Antony Roberts estate agents in London, said: "While property prices have fallen in some areas, it is still very difficult for first-time buyers. With higher borrowing costs, home ownership is out of reach for many."