Did the General Election really stall the housing market?

Home buyers may not have been adopting the “wait and see” approach that many commentators have been espousing, depending on how you look at the latest HMRC property transaction figures.

The taxman’s data for May records a 7.9% increase in transactions between April and May on a non-seasonally adjusted basis to 10,410.

The numbers are also 15.9% up on May 2016, but that may be clouded by the aftermath of last year’s Stamp Duty rush followed by a slump.

On a seasonally adjusted basis, property transactions apparently decreased by 3.3% between April and May and 13.4% annually to 10,760.

HMRC said: “Direct comparisons of residential transactions between May 2017 and May 2016 should be avoided due to the lower than usual level of transactions in May 2016.

“This was associated with the introduction of the higher tax rates on additional properties in April 2016. The large increase in transactions for March 2016 followed by the substantial reduction in April is likely to be associated with the introduction of the higher rates on additional properties.”

Commenting on the figures, Ishaan Malhi, CEO and founder of online mortgage broker Trussle, said: “Home owners are unlikely to be jumping into action until we at least have a little more clarity on the shape of the government.

“Because of this, it’s possible the downward trend in transactions could continue into June.

“Home owners may also be weighing the recent fall in house prices into their decision to sell, but with the spike in inflation we’re witnessing, it looks as though interest rates could rise at some time soon.

“With this in mind, those who are in two minds about moving home should also be thinking about the benefit of remortgaging while record low mortgage rates are still around.”

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