The property market was subdued in May as the EU referendum kept buyers at bay and buy to let landlords took a break from snapping-up second homes.
Property transactions increased by 1.5 per cent between April and May, as sales rebounded somewhat from the dramatic slump after the stamp duty hike hit at the beginning of April, but buyers were still subdued.
There was a spike in transactions in March, before the stamp duty hike came into effect, according to data from HM Revenue and Customs. Sales then plummeted 45 per cent in April.
However, May's figure was 11.9 per cent lower than the same time last year, suggesting the market has also slowed due to the EU referendum.
Adrian Whittaker, sales director at New Street Mortgages, said:
Given the uncertainty surrounding the upcoming EU referendum, it’s not surprising that property transactions have seen only a slight increase in May.
Each day, we are bombarded by arguments on Brexit and Bremain, and the subsequent fallout in the currency markets has clearly had the impact of deterring some buyers from going ahead with their next investment.
Doug Crawford, chief executive of My Home Move, said:
The latest figures show that sales are still struggling to equalise following the surge in transactions pre-stamp duty deadline, alongside a slip in consumer confidence caused by the forthcoming referendum.
The looming EU referendum means would-be buyers and sellers are keen to avoid any uncertainties caused by a surprise outcome. However, in the mid to long-term we expect the market to bounce back.
Rob Weaver, director of investments at crowdfunding website Property Partner, said:
If we vote Remain on Thursday, we can expect a rising trend in activity as buyers and sellers re-engage after the referendum.
Transactions should slowly rebuild as the summer months are historically strong. But the dire shortage of supply is the main reason why we see house prices on a consistently upward trajectory.
Andy Knee, chief executive of property service provider Legal Marketing Services, said:
Once at outcome is decided one of two things could occur. In the event of a Remain win, we would expect to see more consistency for the rest of the year as normality returns to the mortgage market. In the event of a Brexit there is likely to be greater fluctuation while a strategy is agreed and acted upon.
Stability and security remains key for homeowners and that will be the deciding factor over the coming months.