Property sales and mortgage approvals declined in May, with activity expected to remain subdued over the summer as buyers contend with economic pressures and growing political uncertainty.
According to audit, tax and business advisory firm Blick Rothenberg, the housing market is unlikely to see a significant improvement in June, July or August following weaker-than-expected mortgage lending and approval figures released by the Bank of England.
The firm said uncertainty surrounding reported property tax proposals linked to a potential Andy Burnham government is adding to buyer caution at a time when confidence is already fragile.
Reports that allies of Burnham are examining reforms to capital gains tax and other property-related taxes have prompted questions over the future tax landscape, with some prospective buyers and investors expected to delay decisions until there is greater clarity.
The latest Bank of England data showed both net mortgage borrowing and approvals for house purchases fell in May, suggesting demand weakened after a stronger start to the year.
Blick Rothenberg said the combination of softer lending activity, affordability pressures and uncertainty over future government policy is likely to weigh on transaction levels in the coming months, with little sign of a summer recovery.
Heather Powell, a partner at the firm, said: “HMRC’s May 2026 property statistics make for sorry reading. Typically, sales increase as the UK moves into the summer months, but sales in May 2026 were 98,450, which is lower than the 101,030 recorded in April 2026.”
“The Bank of England has reported that the number of mortgage approvals in May 2026 decreased to 56,200, well below the previous six months average of 63,300. This indicates that property sales are unlikely to pick up in June, July or August.”
She continued: “Behind this trend are individuals worried about the cost of living, job security and the cost of a mortgage. They are not rushing into home ownership – or stepping up the housing ladder. No one expects property prices to increase significantly over the next twelve months, so there is no rush to purchase a property.
“Andy Burnham’s proposals for the abolition of Stamp Duty Land Tax (SDLT) and Council Tax and the introduction of an annual property tax are creating uncertainty for homeowners and those thinking of buying their first home. Anyone contemplating moving now has to try and factor in the implications of these potential changes for them and their families, which is adding in further delays.”
Powell added: “Andy Burnham announced proposals to significantly increase investment in Council Homes, supported by the release of surplus government owned land, but delivery of a significant number of new Council Homes within the remaining life of the current parliament is going to be very challenging and is unlikely to fill the gap between the target of 1.5m new homes and the current delivery rate.”
“Job security, falling interest rates, and a good dose of confidence are all needed to trigger an increase in the number of homes being bought, and to give our housebuilders the confidence that there are buyers out there and start building a significant number of new homes.”
While the housing market has slowed across much of the UK, London has experienced one of the most pronounced downturns, according to Simon Gerrard, chairman of Martyn Gerrard Estate Agents in north London.
“Headline figures often mask what is truly happening at the regional level, and London in particular has borne the brunt of a pronounced slowdown,” he said.
Gerrard revealed that his agency saw valuations fall by 33% last week alone, marking a significant slowdown for this stage of the year. Although the recent heatwave dampened market activity, he said the impact of ongoing political uncertainty was impossible to ignore.
He explained: “Demand across London has softened by around 20%, as confidence continues to be eroded by prolonged political paralysis, international uncertainty in the Middle East, and upward pressure on interest rates.
“And it seems the new prime minister in waiting is following Labour’s footsteps of a Hansel and Gretel approach to policy, leaving a trail of broken breadcrumbs to test the waters first. In a market where confidence is the single most important driver, even the suggestion of more interventionist measures risks further dampening sentiment and stalling growth.”
Gerrard added: “At a wider level, political instability remains a major concern. The UK will have seen seven prime ministers in the past decade alone – an unprecedented level of turnover that undermines long-term confidence. Both the electorate and government must prioritise stability and support leadership with a longer-term vision, rather than seeking immediate political gains. Ultimately, policy decisions should be guided by what is best for the country, not short-term party interests.”
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