Transaction dip ‘not good news’ but pent-up demand remains – HMRC
The provisional seasonally adjusted estimate of UK residential property transactions in July was 96,710, 2% lower than June and down 1% compared to July 2025.
However, the provisional non-seasonally adjusted figure stood at 106,620, which was 5% higher than a year earlier and 3% up on the previous month.
Industry figures said the latest data pointed to a housing market is struggling to pick up momentum.
Borrowers remain reluctant to move
Paul Adams, sales director at Pepper Money, said the annual decline suggested that a modest improvement seen in June had not developed into a sustained recovery.
“A fall in July’s transaction numbers against last year tells us June’s brief improvement hasn’t turned into anything more lasting, and that’s consistent with the caution we’re hearing from brokers on the ground,” he said.
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Adams said many homeowners remained reluctant to move as mortgage rates continue to rise.
“Lower mortgage rates locked in a couple of years ago are still keeping a lot of would-be movers in place, because trading up to a significantly more expensive rate simply doesn’t add up for many households right now,” he added.
Stuart Cheetham, CEO of mortgage technology company MQube, said: “July’s transaction figures show a housing market that is still struggling to build momentum, with seasonally adjusted transactions down 2% on June and 1% year-on-year as affordability and mortgage costs continuing to keep some buyers on the sidelines.
“There is clearly pent-up demand, but the market is being squeezed by a combination of economic uncertainty, geopolitical tensions and an unclear interest-rate outlook, meaning the next few months could be defining for the direction of the market.”
Lenders should brace for a slower market
Colin Bradshaw, TwentyCi’s chief executive, said the main concern is whether subdued activity will continue into the autumn.
He continued: “TwentyCi’s sales agreed data is already 5.1% lower year-on-year, with demand being affected by mortgage affordability constraints and wider economic uncertainty.
“Mortgage rates remain sensitive to swap rate movements and household confidence continues to face pressure, suggesting lenders should expect a market that remains active, but where affordability and borrower confidence will continue to constrain the pace of transactions.”
He added that affordability constraints and wider economic uncertainty continued to weigh on demand, while mortgage rates remained sensitive to movements in swap rates and household confidence remained under pressure.
Decline does not mean market has stalled
Mark Harris, chief executive of mortgage broker SPF Private Clients, said the slight monthly decline in seasonally adjusted transactions suggested buyers and sellers were continuing to press ahead with their plans despite challenging conditions.
“Affordability remains an issue for many, so with a number of lenders chipping away at their mortgage pricing in recent weeks, this is good news for those looking to move, ” he said.
Harris continued: “The Bank of England’s decision to hold base rate sends out a strong message of stability, which we hope will continue for a while yet, even if inflation edges upwards in the short term.”
Andrew Lloyd, managing director of Search Acumen, highlighted the figures were disappointing. However, they should be viewed in the context of the housing market’s long-term resilience.
He continued: “This is not good news, but it is also not a reason to panic and forget the property market’s inherent resilience. Property values have taken some serious knocks before, including during the credit crunch and Covid, but bounced back.
“Despite a poor economic environment, the fact is that the residential market in particular is driven by the engines of real life, and unless families stop growing, people stop relocating for work, and retirement is banned, people will still need to move house.”
Resilience is still the buzzword
Jason Tebb, president of OnTheMarket, said: “The market’s underlying resilience remains in evidence. Buyers and sellers who need to move regardless are adapting to changing circumstances and continuing to proceed.”
He added: “The slowdown in annual growth in average property prices suggests expectations are becoming more aligned with market conditions. If the stock coming to market in the autumn is priced appropriately from the outset, this should help transactions progress more quickly and smoothly.”
