UK residential property transactions fell by 3.3% month-on-month, after two months of successive growth.
Now, experts are predicting that this may be a sign of things to come in the market, with many would-be buyers holding off from purchasing property until there is greater economic and political certainty.
The figures have indicated that the UK housing market is slowing, with transactions falling to 100,170 on a seasonally adjusted basis. This is due to investors coming to terms with increased Stamp Duty costs and larger economic instability, as a result of the General Election and Brexit negotiations.
Rob McCoy, product manager of TMA Mortgage Club, noted: ‘Staying put is more attractive than ever for borrowers. In addition to the housing shortage, the latest fall in housing transactions is partly because most homeowners are taking advantage of the low interest rates by remortgaging rather than by moving.’
‘The range of re-financing options currently available and rock bottom-rates, especially on five-year fixed terms, mean the remortgage market is booming,’ he continued.
Will UK sales drop due to political uncertainty?
After a period of decline, some experts are actually expecting property transactions to improve again during the coming months.
However, James Allen, head of Walker Crisps Alternative Investments, feels that there will be a considerable fall during the next quarter.
Mr Allen said: ‘Property transactions show a slight fall this month, but expect to see around three times the deterioration in completed transactions for the next few months.’
‘In May we had a huge lead for Theresa May in the opinion polls and we had a clear direction of travel on Brexit. Now we have a fatally weakened Prime Minister unable to pass the Queen’s Speech, and the prospect of a resurgence of UKIP in response to groundswell opposition to a perceived hard Brexit.
‘Any market abhors uncertainty and the current political instability was unexpected, leaving the latest data short of time to reflect the new situation.’
‘I had expected to see property transactions fall in May, reflecting a slight softening of the UK property market. I now expect transactions to fall by 10% or more from the April figure as sellers will be slow to respond to the risk premium that buyers will now price in.’