The number of homes coming on to the market for sale continued to fall across the UK last month, adding to the widening supply-demand imbalance in the market, new figures show.

Property valuations fell to just 27% of market activity in May, down from 45% a month earlier, as fewer people moved home, according to the latest research from Connells Survey & Valuation.

A shortage of housing stock to choose from, stamp duty impacts at higher levels, along with growing economic uncertainty, have been identified as the main reasons why so many existing homeowners are not looking to sell up.

Connells Survey & Valuation corporate services director John Bagshaw said: “The wind has been knocked out of the market’s sails. Fewer people are choosing to move home. The limited housing stock means that people already on the property ladder can’t see their next move in the market.

“After major votes and the economic turbulence of the past few years, many potential movers have adopted a near constant wait and see attitude. With a hung parliament heading into Brexit negotiations, the uncertainty in the market looks set to continue.

“The long-term increase in property values over the past seven years has reduced the financial incentive to move, with more homes slipping into the higher stamp duty bands. This means potential sellers could face a larger tax bill should they chose to move up the ladder when buying their next home, thus making  it more difficult to free up housing stock to be used more efficiently.”

While home seller valuations have declined as a proportion of market activity, remortgaging in May was found to be 7 percentage points higher than the five-year average for May.

Bagshaw added: “An increasing number of homeowners are choosing to improve rather than move. While rising long-term property values and political uncertainty have made moving home less attractive, they’ve driven up demand for remortgaging.

“With homes worth more than they were five years ago and low interest rates on offer from lenders, many have taken the opportunity to refinance for a better deal. This should cut monthly repayments and provide some additional financial security to help homeowners get through any potential economic uncertainty ahead.”