The UK housing market continues to show signs of resilience as consumer improves and affordability starts to ease, amid cheaper mortgage rates and a lower rate of capital gains tax.

The latest HMRC data released on Friday showed a fourth consecutive monthly rise in house sales in May to 91,290 residential property transactions completed, 17% higher than the year before.

Figures from HMRC also revealed that this was also a 2% rise on the previous month.

This was the fifth consecutive month where residential property transactions rose and the increase in May was higher than the 10% annual rise recorded in April.

On a non-seasonally adjusted basis, residential transactions totalled 91,660 in May, 24% higher than last year and 18% up on the previous month.

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “An increased number of transactions during July this year compared to last year, reflects the more positive outlook on the market. Inflation hoovering around target and the recent decision to cut the interest rate will all be adding to the growing momentum.

“A higher interest rate environment and political uncertainty have played their part in settling demand; however, the property market continues to show resilience and consumer confidence continues to move in the direction.”

Matt Thompson, head of sales at Chestertons, said: “July marks the beginning of the summer season when many aspiring homeowners postpone their search until after their holidays. This year, this quieter period coincided with the scheduled announcement of the Bank of England which contributed to a dip in enquiries in July.”

“Buyers who were in the last stages of their property purchase, however, remained eager to finalise their search,” he added.

“The latest property transaction data paints a far more positive picture this year, than it did last year. Despite challenges the market has faced, overall sentiment is more optimistic and that is starting to filter through to the transaction data,” Nicky Stevenson, managing director of Fine & Country.

“With mortgage lenders lowering their rates, we are likely to see more people step off the sidelines and get in the game, she continued.

Tom Bill, head of UK residential research at Knight Frank, commented: “As the result of falling mortgage rates, transaction volumes were 5% higher than the five-year average in July, which shows the housing market is coming out of its slump.

“By the same measure, sales were 17% down in 2023 due to high inflation and rising borrowing costs, both of which are now coming under control. We expect a busier autumn market than the last two years as buyer appetite returns, defying some of the recent statements made by the government about the fragile state of the economy.”

Nathan Emerson, CEO Propertymark, added: “It is encouraging to see the number of property transactions continue to increase overall and we expect to see a further uplift later on now that the Bank of England has started on the journey of cutting interest rates.

“The UK government has an opportunity to establish a new level of confidence in the housing sector when they return from their summer recess by setting down what potential schemes may be available to first-time buyers over the coming twelve months.

“Propertymark is keen to learn more at the first opportunity on the expected timeframes to deliver nearly two million homes across the next parliamentary term – it is vital that pressure on current demand is eased as soon as possible.”