UK residential property transactions fell in August, with HM Revenue & Customs recording 95,220 seasonally adjusted completions during the month.
The provisional figure was 1% lower than July’s 96,650 transactions and 2% below August 2025, according to the latest HMRC data.
On a non-seasonally adjusted basis, there were 96,250 residential transactions, down 11% month on month and 9% compared with August last year.
HMRC cautioned that transaction figures are a lagging indicator of housing market conditions because completions typically take place two to four months after an offer is made.
HIGHER BORROWING COSTS
Ian Futcher, financial planner at Quilter, said: “UK residential property transactions came in at 95,220 on a seasonally adjusted basis in August 2026, 1% lower than July and 2% below the level recorded a year earlier.
“It is worth remembering that transaction figures are inherently backward looking, reflecting decisions made and mortgages agreed several months ago. Since then, the outlook has become more uncertain, with concerns about inflation persistence, geopolitical tensions and the future path of interest rates all weighing on buyer sentiment.
“While activity has held up reasonably well given the challenges facing households, expectations around monetary policy have shifted in recent weeks. The prospect of interest rates remaining higher for longer, and the possibility of further tightening, has pushed up swap rates and renewed pressure on mortgage pricing.
“As a result, prospective buyers are once again facing greater uncertainty over borrowing costs at a time when affordability remains stretched, particularly for first-time buyers contending with elevated mortgage payments and higher upfront costs.”
Richard Donnell, executive director at Zoopla, said: “Housing sales are slowing in the face of higher mortgage rates adding to the cost of buying a home. The sales reported in this data were first agreed 5-6 months ago, with the very latest data showing that sales agreed are 9% lower as mortgage rates reach over 5% having started the year at 4%.
“There remains demand for housing but sellers looking to find a buy need to set their price carefully and seek the advice of local agents.”
BUDGET UNCERTAINTY
Melanie Spencer, growth director at Target Group, said: “While not unexpected, it is disappointing to see transactions dip once again. Mortgage rates have risen sharply since the start of the Iran conflict, as lenders react to volatility in swap rates and the wider economy.
“With completions data always taking a couple of months to catch up, we are seeing a market that is really feeling those higher borrowing costs in a sustained way.
“The big question is what happens next. Mortgage pricing remains highly volatile and with the Bank of England looking set to break from its holding pattern and inflation still above target, there looks to be little relief on the horizon.
“Add in speculation around the Budget – particularly on property taxes, stamp duty and a new equity loan scheme and buyers are caught between rushing to complete or lock in a deal or sitting on their hands until they know what they’re dealing with.
“With borrowing costs, competition and demand all remaining unpredictable, lenders who are agile enough to respond to changes in the market at short notice will be in the best position to keep pace.”
Ryan McGrath, director of second charge mortgages at Pepper Money, said: “Yesterday’s figures suggest the market lost some momentum over the summer, and that fits with the caution brokers have been describing for a few months now as well as the Bank of England data from yesterday, which showed a fall in mortgage approvals.
“The months ahead are harder to call. Inflation has risen to 3.1%, the Bank of England held rates this month with three members voting for a rise, and borrowers hoping for cheaper mortgages are having to rethink their plans. Many who locked in lower rates a couple of years ago still see little reason to move.
“For homeowners who need more space or want to improve the quality and energy efficiency of their property, renovating can provide an alternative to moving. A second charge mortgage can allow them to use equity in their home to fund those plans while keeping their first mortgage in place.
“With the Budget approaching, there is an opportunity for the government to support this investment in the UK’s existing housing stock.
“The Treasury is already evaluating VAT reliefs for renovation and alteration work, and reducing the tax burden on home improvements could help homeowners’ budgets go further, while supporting the trades and businesses that deliver that work.”
SALES AGREED POINT TO FURTHER SLOWDOWN
Colin Bradshaw, chief executive at TwentyCi, said: “The fall in residential transactions in August reflects the more cautious buyer environment that is becoming increasingly evident across the housing market.
“Our latest data shows that sales agreed volumes fell by 6% year-on-year in August, marking the fourth consecutive month in which demand has declined by more than 5%.
“This suggests that weaker buyer demand is beginning to feed through into completed transaction volumes, although the full impact will take time to emerge given the lag between a sale being agreed and completion.
“For mortgage lenders, this makes the sales-agreed data an important indicator of what lies ahead, particularly as mortgage affordability and wider economic uncertainty continue to weigh on demand.
“The combination of rising supply and subdued demand points to a more cautious market as we move towards the end of the year.”
Non-residential activity was broadly stable on a seasonally adjusted basis. HMRC recorded 10,220 transactions in August, down 1% from July and marginally lower than a year earlier. The non-seasonally adjusted total of 9,080 was 17% below July and 5% lower year on year.
