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Residential sales have returned to more than 90% of their pre-pandemic average, Savills claims.

It comes as the latest HMRC property transaction data showed a 17% annual rise in residential sales for May, up 2% on a monthly basis to 91,290.

Transactions were up 24% annually on a non-seasonally-adjusted basis and 18% higher than in April at 91,660.

Frances McDonald, director of research at Savills, said: “Completed transactions in May were 17% up on last year, having increased for the fifth consecutive month, on a seasonally adjusted basis. This increase brings them back to within more than 90% their pre-pandemic average for the first time since March 2023.

“More recent lead indicators from TwentyCi suggest a degree of caution from buyers and sellers in the weeks running up to the general election. While agree sales remain 5% higher than the same time last year, this is down the 18% increase seen in May. For the mainstream markets, affordability remains the single biggest driver of demand and with some lenders starting to lower rates in anticipation of a base rate cut, more stability is likely to return to the mortgage markets over the summer.”

Tom Bill, head of UK residential research at Knight Frank said it is a “slow return to normality” for the UK housing market.

He said: “Sales were 8% below the five-year average in May if you take out 2020, which compares to an equivalent decrease of 17% last year so things are moving in the right direction. With the election behind us and the first rate cut since March 2020 imminent or having happened, there should be a more notable seasonal uplift in autumn than spring this year and we expect UK prices to rise by 3% in 2024.”

Nathan Emerson, chief executive of Propertymark, added: “Since the start of the year, the housing market has seen a much-anticipated traction return and it’s extremely positive to see a trend of growth finally emerging again. Now that inflation is down within the initially targeted range, over the coming months we are optimistic to see a cut in base rates from the Bank of England. 

“When this does happen, it will help reinforce further progression and bring a more consistent marketplace.”