Completed house sales fell 5.7 per cent last month compared to last year as potential buyers were put off by stamp duty and higher prices in urban areas.
House sales also declined three per cent between May and June to 96,370, according to HMRC figures.
The Office for National Statistics’ house price index last week revealed that house price growth in May slowed to its lowest annual rate in almost five years.
On average though, UK prices have risen 3% in the year to May, despite dropping 3.5 % in April and to the lowest annual growth rate in six years, said the ONS.
Kevin Roberts, director, Legal & General Mortgage Club, said: ‘Overall housing transaction figures are stagnant.
‘Barriers to moving, such as stamp duty and the high price of property in our urban areas, means that for many the maxim remains “improve, not move”, as they seek to renovate or develop their homes, rather than move up the housing ladder. The biggest factor is housing supply.”
‘The nation simply hasn’t built enough new homes over the last decade to keep up with demand.’
Jeremy Leaf, former RICS residential chairman, now a north London estate agent said the transaction numbers were a better indicator of market strength than house prices, reflecting the economic and political uncertainty.
‘We certainly would have expected higher figures bearing in mind the spring buying season is generally the best for the property market.
‘However, we are not really surprised when, on the ground, we are seeing fewer buyers nervously trying to negotiate best possible terms and transaction times lengthening as a result.
‘We don’t expect to see any great change but have noticed more listings and viewings in the past month or so, which hopefully will be reflected in slightly higher transaction numbers later in the year.’
This week experts warned that an increase in lenders placing down valuations on properties could signal a growing anxiety over the state of the housing market.
In the past two years, the number of sales resulting in a ‘down valuation’ has increased from one in 20 to one in five – the highest level since the 2008 financial crash.