The number of UK residential property transactions fell in January marking the first notable slowdown after several months of relative stability.
According to the latest National Statistics from HM Revenue & Customs (HMRC), the provisional seasonally adjusted estimate for UK residential transactions in January 2026 stood at 94,680.
This is 5% lower than December 2025’s figure of 99,710 and marginally down (less than 1%) compared with January 2025.
On a non-seasonally adjusted basis, residential transactions totalled 79,880 in January 2026. This represents a 24% drop from December 2025 and a 3% decrease compared with January last year.
HMRC said the January fall is the first significant monthly decline following a period of stability in activity since summer 2025.
However, the figures remain broadly in line with recent years. For comparison, seasonally adjusted transactions in January 2025 were 95,430, while January 2024 recorded 82,430.
INDUSTRY REACTION
Tony Hall, head of business development at Saffron for Intermediaries, said: “A modest dip in transactions at the start of the year is not entirely unexpected following stronger activity late last year.
“Buyers are still adjusting to rate expectations, and some caution remains. However, lender competition is robust, especially specialist markets.
“We’re seeing ongoing demand from borrowers with more complex income streams, who continue to seek tailored solutions despite short-term fluctuations.
FIRST-TIME BUYER HELP
Tomer Aboody, director of specialist lender MT Finance, said: “With inflation easing and base rate currently sitting at 3.75%, the property market is finely balanced and highly responsive to the right signals.
“A period of lower mortgage rates combined with a lack of patience and eagerness to get deals done, will see higher transaction levels in coming months.
“The aspiration to own a home remains as strong as ever, but what has changed in recent years is the belief that this dream is achievable. For many, both young and old, homeownership feels theoretical and perpetually out of reach.
“With the spring forecast imminent, the government must examine current market realities for first-time buyers and work alongside specialist providers to expand access which will boost transactions, rather than relying solely on high-street lenders to deliver for all.”
UNEXPECTED FALL
Maria Harris, chair of the Open Property Data Association, said: “The fall in transaction activity in January was unexpected and suggests that some of the UK’s economic issues are impacting home moving decisions in the short-term.
“A buoyant housing market is important for the wider economy, providing a boost for lenders, brokers, estate agents, proptech firms and conveyancers, and so it’s important that confidence returns quickly to the market.
“At the Open Property Data Association (OPDA), we believe the fall in activity highlights the urgent need to modernise the underlying property data ecosystem. We know people are more likely to move when the process is more seamless.”
RAY OF HOPE
Hamza Behzad, business development director at Finova, said: “A slower market is no cause for alarm, but it may point to a lack of momentum.
“Despite a strong choice of low-deposit mortgages, and a base rate at its lowest level since early 2023, affordability pressures and economic uncertainty are weighing on buyer confidence.
“For many households, improved product choice alone isn’t enough to offset higher living costs and tightening household budgets.
“However, there is ray of hope. Big market players are cutting rates by up to 0.2% and these rates could edge down further in March.
“As rental prices climb and rates ease, monthly mortgage repayments are now comparable to, and in some cases lower than, the cost of renting. For first-time buyers who were previously priced out – and for movers who paused plans during economic uncertainty — the equation has changed. While some will still struggle with affordability, buying is becoming a more realistic option.”
ACTIVITY BOOST
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Lower mortgage rates continue to support activity in the housing market.
“Since the Budget, there has been a strong level of enquiries with application levels very similar to those seen in January 2025.
“The chances of a further interest rate cut this month have improved following recent economic data including rising unemployment, falling inflation and lacklustre GDP, which should provide a further boost for market activity.”
