The UK property market is still buoyant, despite fears that rising inflation and the cost of living crisis will stifle growth.
The number of properties changing hands fell again last month from its pandemic highs last year. However, with some 100,870 homes sold in May, the latest government data showed a 1.6% increase since April.
Transaction levels remain higher than before the pandemic, although government estimates reveal that it expects the market to continue to slow next year.
“There are still signs of strong activity in the market even though some of the heat has come out of it, and mortgage brokers remain exceptionally busy,” said Mark Harris, managing director of mortgage broker SPF Private Clients.
As the pandemic-era race for space and stamp duties sent the market into a frenzy, lockdown restrictions clashed with post-Brexit bureaucracy and the rise of e-commerce saw companies and real estate investment funds rush to take over non-residential logistics spaces.
Non-residential transactions in May rose nearly 10% to a total of 10,250, compared to a year ago.
However, trading levels have only increased by 0.4% since April, another sign that the market is cooling.
“Previous declines in the number of sales could partly be blamed on the shortage of inventory, but we are now seeing, at the pointed end, a slowdown in demand caused mainly by higher inflation, as well as the uncertainty as to its end,” said Jeremy Leaf, a North London estate agent and former RICS residential chairman.
“This lack of choice, combined with low unemployment and rising wages, means no major corrections are expected.”