UK residential property transactions fell 2% in May, marking the second consecutive monthly decline, according to data released by HM Revenue and Customs.
Seasonally adjusted residential transactions dropped from 100,440 in April to 98,450 in May. The figures were 17% higher than May 2025, though comparisons are complicated by the previous year’s Stamp Duty threshold changes which ended in April.
Non-seasonally adjusted residential transactions showed a 7% increase in May compared to April. The previous month had recorded a 3% fall, with transactions declining from 103,910 in March to 101,030 in April.
Market pressures mount
Tom Bill, Head of UK Residential Research at Knight Frank, noted the absence of the typical seasonal bounce in activity. “Transactions falling 2% between April and May at precisely the time of year when they should be rising” indicates underlying weakness, he said. Bill attributed the slowdown to the Middle East conflict and associated mortgage rate increases, alongside domestic political uncertainty affecting buyer confidence.
Anthony Codling, Managing Director at RBC Capital Markets, provided context by noting that May’s figure sits on the five-year average and just below the ten-year average. However, he pointed to May mortgage approvals falling 15% month-on-month and 11% year-on-year as an early indicator of further challenges ahead.
Richard Donnell, Executive Director at Zoopla, explained that housing transactions reflect sales agreed 5-6 months earlier. He forecast completed transactions would be 6-8% lower than last year, a significant revision from the 2% drop predicted at the end of last year. “Higher mortgage rates over April have hit new sales agreed which are down 7% year on year in June,” Donnell said.
Lender activity and affordability
Despite the transaction decline, some industry figures highlighted improving conditions for borrowers. Nathan Emerson, Chief Executive at Propertymark, described the increase in non-seasonally adjusted figures as “encouraging”, with member agents reporting strong interest in well-priced homes where stock is available.
Iain McKenzie, CEO at The Guild of Property Professionals, pointed to inflation holding at 2.8% and the Bank of England maintaining the base rate at 3.75% as providing stability. He noted that Nationwide cut rates three times in June alone, with competitive lender activity translating into improved affordability.
Mark Harris, Chief Executive at SPF Private Clients, confirmed that mortgage lenders continue trimming rates due to improving funding conditions, though he cautioned borrowers against complacency regarding pricing fluctuations.
Regional variations
Amy Reynolds, Head of Sales at Antony Roberts, described a more nuanced picture on the ground than national data suggests. “A good proportion of buyers we are seeing are equity-rich or cash, and well-priced family homes in the right roads are still drawing competitive interest,” she said. Reynolds expects a quieter, price-sensitive summer with activity firming in autumn once buyers have clarity on rates and geopolitical developments.
Jeremy Leaf, a north London estate agent and former RICS residential chairman, emphasised that transactions provide a better measure of market health than prices. He noted it has become harder to generate commitment and momentum, with additional political concerns compounding economic uncertainty.
Outlook
Jason Tebb, President at OnTheMarket, characterised the market as favouring buyers, with steady interest rates and falling mortgage costs assisting affordability. “It is a strong buyer’s market, so those ready to make a move are finding they are in a compelling position,” he said.
Tomer Aboody, Director at MT Finance, attributed higher year-on-year transaction levels to buyers taking advantage of lower mortgage rates and increased lender flexibility, though uncertainty around government leadership and macro factors including the Middle East conflict have dampened month-on-month activity.
The data indicates the UK housing market faces a challenging period ahead, with transaction volumes under pressure from multiple headwinds including mortgage rate volatility, political uncertainty, and global economic factors. Industry professionals expect cautious buyer behaviour and price sensitivity to characterise the summer months, with potential recovery dependent on improved clarity around economic conditions and borrowing costs.
