UK property transactions edged up in July as confidence begins to return to the housing market, according to the latest figures from HM Revenue & Customs.

The provisional seasonally adjusted number of residential transactions rose to 95,580 in July, 1% higher than in June and 4% above the same month last year. On a non-seasonally adjusted basis, residential activity was even stronger, climbing to 101,070 – a 5% rise on the month and 4% up year-on-year.

Non-residential activity was steadier. Seasonally adjusted transactions fell 1% on the month to 10,260 but remained 1% higher than in July 2024. On a non-adjusted basis, 10,620 non-residential transactions were recorded, 4% up on June and broadly unchanged from a year earlier.

MODEST IMPROVEMENT

Karen Noye, mortgage expert at Quilter, said the figures pointed to “modest but consistent improvement” in the housing market. “On a non-seasonally adjusted basis, activity was even stronger, with 101,070 transactions recorded. This represents a 5% increase month-on-month and a 4% rise year-on-year, suggesting that buyer demand remains resilient despite affordability challenges,” she said.

But she cautioned that “uncertainty around potential tax reforms in the upcoming Budget… could prompt some buyers and sellers to sit on their hands”.

Simon Webb, managing director of capital markets and finance at LiveMore, said the market was “building resilience after a challenging period”.

He added: “The recent base rate cut has clearly played a part in encouraging activity, and a further cut or hold by the MPC in September would provide the consistency buyers and lenders need.”

MOMENTUM COULD BUILD

Richard Pike, chief sales and marketing officer at Phoebus Software, also linked the rise in transactions to interest rate policy. “The widely predicted base rate cut in August has clearly encouraged activity, and as a result of that cut, we could see this momentum build,” he said.

Melanie Spencer, growth director at Target Group, described the increase as “hugely welcome” in a climate of economic and political uncertainty.

WILLINGNESS TO LEND

“There is a real willingness to lend and with increased scope from more flexible mortgage rules, lenders can really throw their arms around more clients,” she said, though she warned that “there could still be some choppy waters ahead, with inflation far from subdued and real unknowns when it comes global trade and further escalations abroad”.

While July’s data indicates that transactions are on an upward trajectory, industry figures agree that the outlook will hinge heavily on the Bank of England’s next moves and the government’s fiscal plans in the autumn.