"Although lower than in 2022 the uplift from the number of transactions in May shows a level of confidence returning."
The number of UK residential transactions was 94,690 in June, 9% lower than June 2022 but 28% higher than May, according to the latest figures from HMRC.
On a seasonally adjusted basis transactions totalled 85,870, 15% lower than June 2022 and 6% higher than May 2023.
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: "Transaction numbers are holding up in the face of higher interest rates and the cost of living.
"Swap rates, which underpin the pricing of fixed rate mortgages, and have been exceptionally volatile in recent weeks, have settled down since the encouraging dip in inflation.
"A number of lenders, including HSBC and Barclays, have reduced their fixed rates so borrowers will be hoping that other lenders follow suit in coming days and weeks, and that the worst of the rate rises are behind us."
Terry Woodley, managing director of development finance at Shawbrook, said: "While the month-on-month increase may seem like good news, and typical of the often-busier summer months, the data doesn’t tell the whole story and all the signs are pointing towards a slowdown in the market as we see out 2023.
"Property developers will be concerned about reduced demand and longer selling periods, which could affect their ability to cover construction costs, repay loans, or invest in new projects. Access to funding with a specialist that can offer consistency, flexibility and certainty will be a key priority. Seasoned developers will be monitoring the trends closely and re-evaluating their business strategies to make the most of new opportunities. They may need to focus on different market segments, locations, or property types to adapt to changing market conditions."
Adam Oldfield, chief revenue officer at Phoebus Software, added: “With so many conflicting reports around the state of the housing market and mortgages in particular, we have to take encouragement from the non-seasonally adjusted figures from HMRC today. Although lower than in 2022 the uplift from the number of transactions in May shows a level of confidence returning. Most of these transactions have been in the pipleline for over three months, a time when the hikes in interest rates coupled with the highest inflation for years could have caused a serious lack of confidence. It appears that despite everything the need to move has outweighed these negatives.
“With the news that the American Federal Bank increased interest rates this week, it is understandable that borrowers will be anticipating the Bank of England to do likewise. However, with the recent drops in swap rates, it is up to lenders and brokers to educate their clients that perhaps a base rate rise next week may not necessarily mean an immediate rise in mortgage rates. There are plenty of opportunities, especially in the remortgage market, so a proactive approach is vital to keep things moving in the coming months.”
