The provisional seasonally adjusted estimate of UK residential transactions has fallen by 3% in May compared to April, to 80,020, HM Revenue and Customs (HMRC) has revealed.

HMRC also stated that the figure is also over a quarter (27%) lower than May 2022.

However, the provisional non-seasonally adjusted estimate of UK residential transactions in May 2023 is 74,360, which is 10% higher than April, but is 25% lower than a year previous.

The statistics were based upon records by HMRC, Revenue Scotland and the Welsh Revenue Authority (WRA) for Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) respectively.

Despite the fall in transactions, HMRC pointed out that March was a strong month, due to the larger number of working days relative to April. It was also the final month for purchases to complete under the government’s help to buy equity loan scheme.

Managing director at more2life, Ben Waugh, said: “Market turbulence and swap rate volatility is no doubt having an impact on consumer confidence and capacity to buy, as shown by today’s dip in seasonally adjusted transaction levels. Challenging as the current climate may be, we should remember the stability the market has demonstrated in the last six months – defying earlier predictions of a recession – and the increasing amount of support that is available for consumers.

“That said, for most homeowners in the UK, the recent interest rate increase to 5% will be very much front of mind as will inflation which continues to be stubbornly high at 8.7%. While those who need to sell or buy property will no doubt find a way, others may be tempted to wait until they are more confident about what to expect next.

“Unfortunately, there is no easy solution nor crystal ball so each buyer ultimately needs to consider what works for them and their individual circumstances over what time frame. Waiting is not always the right answer and people need to consider all their options. Raising a larger deposit will make this choice easier and we expect more people to look for support from the equity currently tied up in the Bank of Mum and Dad.”

National operations director at Just Mortgages also added: “Following a surprisingly strong March, the April slowdown has continued into May. It is shifting times in the housing market with widespread disappointment that interest rates climbed a further 0.5% to 5% this month.

“We continue to receive inquiries for new mortgage applications through our brokers nationwide, indicating a persistent demand in the housing market. The prevailing belief among many is that the resilient house prices have upheld confidence in the housing market, reinforcing the intrinsic stability and security of bricks and mortar.

“Although most of the headlines about the housing market are financial, we should remember that people are buying homes and not just houses and that’s what is really important and driving new business.

“We fully expect transactions to increase over the coming months as interest rates fall and inflation reduces the cost of living burden.”

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