The number of UK residential property transactions was 94,690 in June, 28% higher than May, according to the latest figures from HMRC.

But despite the month-on-month increase, transactions are down 9% compared with June 2022.

On a seasonally adjusted basis transactions totalled 85,870, 15% lower than June 2022 and 6% higher than May 2023.

Industry reactions:

Nicky Stevenson, managing director at Fine & Country, said: “The property market remains resilient despite soaring mortgage rates, with sales increasing in June.

“Although buyer demand is weaker than last year, it is on a par with 2019, which was a fairly typical year in terms of sales and price growth.

“Despite recent increases in rates, mortgage approvals – an early indicator of future property transactions – rose slightly in May.

“With long delays between agreeing a sale and completing, it suggests that transaction levels could remain broadly stable over the coming months and into early autumn.

“The fall in inflation recorded earlier this month is also raising hopes that the Bank of England can slow down its interest rate hikes, which will bring much more stability to the mortgage market.”

Chris Druce, senior research analyst at Knight Frank, commented: “Activity within the UK property market has taken a hit due to the cost of borrowing being at its highest since 2008.

“According to our latest sentiment survey, a third of buyers have seen a reduction in their spending power due to the surge in the cost of a mortgage after 13 consecutive interest rate rises by the Bank of England.

“Growing expectations that we may be nearing the peak for interest rates as inflation slows will help to settle buyers’ frayed nerves, but the affordability challenge will remain, and despite this month’s increase in transactions it’s unlikely we’ll see a dramatic turnaround in overall sales volumes this year.

“However, strong wage growth and high employment, along with forbearance from lenders and the availability of longer fixed-rate mortgage terms, is the reason activity is moderating overall rather than stopping.

“More pain will build in the system as fixed-rate mortgages continue to be renewed at higher rates, with the higher cost of borrowing acting as a drag on the UK property market through the rest of 2023 and into next year. However, we will avoid a cliff-edge moment, and house prices will fall by 10% during the remainder of this year and next.”

Jason Tebb, CEO of OheMarket, commented: “Transaction numbers, often regarded as a more useful indicator of the health of the housing market than house prices, rose in June.

“Despite challenging conditions in recent months with regard to mortgage rates and inflation, these numbers indicate that focused buyers who need to move are doing so regardless. Transaction volumes are similar to early 2020, pre-pandemic levels, highlighting the abnormally high activity in the year following the end of the lockdowns, where there was low supply, high demand, low interest rates and temporarily reduced stamp duty.

“Our own data shows that property market sentiment remained remarkably stable in June despite economic uncertainty. There is no reason why sellers who are serious about transacting in coming months cannot be successful as long as they price realistically.”

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.”

Nicholas Finn, ececutive director of Garrington Property Finders, remarked: “It’s too early to call if this is a fluke or a fillip for the property market, but June’s jump in home sales is a welcome surprise.

“What it certainly isn’t – yet – is a complete turnaround. On a seasonally adjusted basis, the number of sales completed last month was 15% lower than in a typical June, and barely a third more than the level achieved during the lockdown-affected June of 2020.

“With property prices ticking down in most parts of the UK, some discretionary sellers are pausing their plans and this is holding back the number of homes being sold.

“Nevertheless there is still a steady stream of homes coming onto the market from people who need to sell, and their pragmatic approach to pricing may be the reason for June’s uptick in completed sales.

“Many of these sellers are opting to swallow the bitter medicine of a price cut early, rather than asking an optimistically high price only to have their home sit on the shelf unsold and then be forced into a bigger price reduction later.

“This is creating a cycle of gradually falling prices and thus strong buying opportunities for strategic buyers who are willing to focus on longer-term value rather than just what might happen in the coming months.

“With several of the high street lenders starting to trim mortgage interest rates, there are hopes that the cost of borrowing will ease in the second half of 2023. This could prompt more first-time buyers and second-steppers – who tend to be more reliant on borrowing – to return to the market and capitalise on lower prices.”

Andy Sommerville, director at Search Acumen, said: “The increase in transaction volumes this month are positive to see, but come from a low base and are indicative of the stagnation grappling the UK economy. The data tells us that total residential property sales so far this year are down by 20% compared to 2022, whilst commercial transactions are down 8% [see tables below]. To give that more context, the average monthly volume of property transactions in the second half of last year came in at 110,000, whilst this year that figure is averaging at 80,460 (or 102,673 vs 86,285 on a seasonally adjusted basis).

“There is no doubt the housing market is slowing down from a frenzied pace post-pandemic, however if the current trend continues, this will impact all economies related to the built environment which is no good for anyone. The government, banks and lenders, all need to work together to support the stability of the market to benefit the entire UK economy.

“The market is up against some tough challenges: both investor and consumer confidence continue to be hampered by rising debt thanks to high interest rates and persistent inflation. Though we still foresee tough times ahead for those reliant on more affordable mortgage rates, more generally speaking, the resilience of the commercial transaction market is helping to steady ship, with many hoping we’ve now reached the bottom.

“This down period, before hopefully a slow building recovery over the next few years, is a fantastic time to consider the improvements that can be made to the property sector. It is time for all players in the transaction journey to realise the impact that a digital-first approach to processes could have on the industry as a whole – saving time and making efficiencies that help all parties involved. For buyers and sellers, faster transactions lessen the risk of fall-throughs and collapsing chains. For lawyers, using technology-driven tools will enable them to service clients faster, meet their widening needs and expectations, whilst ready to take on more clients as market activity picks up.”