Residential property transactions in May dropped by 3.3 per cent on the previous month, according to HMRC data.
Transactions fell to 100,170 on a seasonally adjusted basis, following two successive months of growth.
The figure is 13.4 per cent higher compared with the same month last year, when the introduction of higher Stamp Duty rates led to a spike in transactions during March and a slump during the following months.
Rob McCoy, product manager of TMA Mortgage Club, said: “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. Product transfers have also soared this year as more lenders now recognise the role intermediaries play in advising borrowers to stay put. Therefore, the mortgage market has remained insulated from the dip in transactions.
“The affordability of housing remains a concern, however. In light of the rate of inflation rising nearly a per cent faster than wages, along with a rise in unsecured credit card debt, policymakers are assessing how to improve access to funding for the less affluent.”
simon.allin@ft.com
