The UK residential property market has seen a cooling trend as the latest figures from HMRC reveal a decline in transaction volumes for September 2026. Seasonally adjusted residential transactions fell to 94,800, down from 95,300 in August. On an annual basis, the sector experienced a 4% decrease compared to the same period last year, underscoring a period of growing caution among both buyers and sellers.
Market experts suggest these figures, which reflect property completions finalized two to four months after initial offers, serve as a barometer for current sentiment toward government housing policy and the broader economic climate.
Tomer Aboody, director of specialist lender MT Finance, pointed to a pervasive lack of confidence in current government strategy as a primary driver of the slowdown. “Seeing a further drop in seasonally-adjusted transactions once again reaffirms the lack of confidence in the government as buyers and sellers fear increased costs and rising interest rates, deterring them from transacting,” Aboody stated.
The barrier of affordability remains a critical concern, particularly for those looking to enter the market for the first time. Nick Leeming, chairman of Jackson-Stops, acknowledged that while recent government interventions—including the introduction of a new First Time Buyer ISA, a fresh equity loan scheme, and adjustments to the Lifetime ISA withdrawal charge—are positive signals, they may not be enough to turn the tide.
“These measures are a welcome recognition of the barriers facing people trying to get onto the property ladder,” Leeming said. “However, while they could help improve confidence and support longer-term saving, they do not remove the wider affordability challenges facing first-time buyers, particularly when it comes to raising a deposit and securing a mortgage.”
Furthermore, the timing of government support appears to be exacerbating the hesitation in the market. Jeremy Leaf, a north London estate agent and former RICS residential chairman, argued that the delayed implementation of the “Your First Home” scheme is creating a “wait-and-see” approach that is stifling current activity.
“The delay to the introduction of the government’s new ‘Your First Home’ scheme until next spring will mean transactions will decline further while aspiring first-time buyers continue to delay taking that crucial first step onto the housing ladder,” Leaf explained.
As the market heads toward the end of the year, these figures highlight a fragile environment. With interest rate concerns persisting and structural affordability hurdles remaining for new buyers, industry analysts expect that transactional volume may remain subdued until the promised government schemes are fully operational next year. For now, the housing market remains in a state of cautious stagnation as stakeholders wait for clearer economic indicators and the eventual rollout of promised support measures.
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