While seasonal trends typically bring increased buyer activity during late spring and early summer, the latest figures suggest that many prospective homeowners remain cautious amid ongoing economic uncertainty, affordability pressures and potential policy changes.

A Weak Start to the Summer Market

According to HMRC data, residential property sales fell from 101,030 in April 2026 to 98,450 in May 2026. At the same time, the Bank of England reported that mortgage approvals dropped to 56,200 in May, significantly below the previous six-month average of 63,300.

Commenting on the figures, Heather Powell, Partner, 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.

The decline in mortgage approvals is particularly significant because it is often viewed as a leading indicator of future housing market activity. Fewer approvals today typically translate into fewer completed transactions in the months ahead.

Why Buyers Are Holding Back

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.

This highlights an often-overlooked challenge for policymakers: uncertainty can have almost as much impact on market behaviour as the policies themselves. When buyers are unsure about future tax costs or housing-related reforms, many simply postpone decisions until greater clarity emerges.

The Supply Challenge Remains

Alongside demand concerns, questions remain over whether housing supply can increase sufficiently to address the UK’s long-standing housing shortage.

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.

For businesses operating in the construction, property development and real estate sectors, this creates an uncertain backdrop. Housebuilders need confidence that demand exists before committing to large-scale projects, while investors will be closely monitoring both government policy and buyer sentiment.

What Could Revive the Market?

The housing market remains highly sensitive to consumer confidence. While lower interest rates may provide some support, affordability concerns and economic uncertainty continue to weigh on purchasing decisions.

Heather concludes:

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.

Without those ingredients, housing market activity may remain subdued through the summer and potentially beyond.

What Should You Consider Next?

Whether you are a homeowner, first-time buyer, investor or business operating in the property sector, the current environment warrants careful planning.

• Monitor developments around proposed property tax reforms, including any potential changes to SDLT, Council Tax and the introduction of an annual property tax
• Review financing options regularly, as further interest rate movements could affect borrowing costs and affordability
• Consider the impact of delayed housing market activity on investment, development and business growth plans
• Factor economic uncertainty and consumer confidence into forecasts, particularly if your business has exposure to residential property markets
• Seek professional advice before making major property or investment decisions, particularly where future tax changes could affect costs and returns

While market conditions remain challenging, understanding the drivers behind current trends can help businesses and individuals make more informed decisions and position themselves effectively for any future recovery.

Would you like to know more?

If you’d like to discuss the above, please speak to your usual Blick Rothenberg contact or Heather Powell using the form below.