UK property transactions picked up in October, with residential activity reaching its strongest level since the spring according to the latest HMRC data.

Seasonally adjusted residential transactions rose 2% month-on-month to 98,450, the highest figure since March 2025.

However, activity remains 2% lower than the same month last year. On a non-seasonally adjusted basis, residential transactions climbed 13% between September and October to 116,230 and stood 4% higher year-on-year.

The non-residential market showed a more subdued picture. Seasonally adjusted transactions totalled 10,250 in October – 4% higher than in September but still 29% below October 2024.

STABILISING MARKET

HMRC pointed out that the comparison is distorted by unusually elevated activity last year, when concerns ahead of the Autumn Budget 2024 pushed non-residential deals to their highest level since records began in 2005.

Non-seasonally adjusted non-residential transactions rose 10% on the month to 11,290 but remained 26% down on the year.

The figures suggest a property market that was stabilising in the run-up to the Autumn Budget, with housing activity recovering modestly while commercial transactions continue to feel the effects of last year’s pre-budget surge.

INDUSTRY REACTION

Richard Pike, chief sales and marketing officer at Phoebus Software, said: “The double-digit monthly increase in property transactions in October shows that buyer demand remained strong despite the uncertainty in the run-up to the Budget.

“However, it doesn’t paint the full picture, as the October data likely reflects deals agreed earlier in the year. Many buyers and sellers have been cautious over the past few weeks waiting to see how taxes and regulations may change, so we’ll have to wait until next month to see how this may have affected activity.”

BUDGET SMORGASBORD

And he added: “What’s certain is the smorgasbord of measures announced by Rachel Reeves on Wednesday will affect property transaction volumes in 2026. The introduction of the ‘mansion tax’ will stifle activity at the top end of the market, potentially creating a trickle-down effect, while the changes to the ISA allowance could reduce the flow of capital to banks and building societies, leading to an increase in mortgage rates.

“Furthermore, she failed to tackle the structural supply issues in the market. The government looks set to fall well short of its 1.5 million homes target by 2029, which could keep prices stubbornly high and limit options for those looking to move.

“Amidst the chaos of the OBR releasing the budget details early, the regulator lowered its expectations for the number of annual housing transactions from its March forecast, driven by past increases in stamp duty, a slight increase in its forecast for average mortgage rates, and the impact of an ageing population moving less frequently.”

RESILIENT MARKET

Lee Williams, national sales manager, Saffron for Intermediaries, said: “Today’s data shows a steady increase in housing market activity through October, reflecting the underlying resilience we’ve continued to see in recent months.

“Despite speculation that some buyers might take a ‘wait and see’ approach ahead of the Autumn Budget, confidence has remained strong in sections of the market, supported by easing inflationary pressures and a growing range of competitive mortgage products.

“As we now move beyond the Budget, the focus will shift to how the Chancellor’s measures influence sentiment and activity in the months ahead.”

COST OF MOVING TOO HIGH

Tomer Aboody, director of specialist lender MT Finance, says: “With the Budget lacking any form of positive encouragement for the property market, it is difficult to see how transactions numbers will meaningfully improve.

“In the scheme of things, transaction numbers are low as the cost of moving is still very high. Assistance is needed in order to encourage buyers and sellers to move, and get the market functioning properly.

“An interest rate reduction early in 2026, if not at next month’s meeting, would go some way to encouraging more activity.”

BUDGET WILL DO NOTHING FOR DEMAND

Tom Bill, head of UK residential research at Knight Frank, said: “Housing transactions fell last month compared to the previous year, which was also marked by a period of pre-Budget uncertainty.

“Apprehension among buyers also led to weaker house price growth in recent months thanks to the recent bout of prolonged speculation around taxation.

“I would expect a relief bounce now we have certainty, but a tax-raising Budget that does things like freeze income tax bands, will do nothing for demand in the medium term.”