Demand is building across the housing market, but uncertainty over interest rates, economic conditions and government policy continues to weigh on buyer and seller confidence, according to industry commentators following the release of the latest housing transaction data.
UK property transactions held steady in December, according to the latest HMRC data. The provisional seasonally adjusted estimate for the month was 100,440, up 5% on December 2024 and just under 1% below November 2025. The non-seasonally adjusted estimate was 105,730, representing a 7% rise year-on-year and a 1% increase on the previous month.
HMRC noted that monthly transaction levels have been stable since summer 2025, with early activity in the 2025/26 financial year influenced by SDLT threshold changes from 1 April 2025.
Industry reaction:
Andrew Lloyd, managing director at Search Acumen: “December’s figures show a market holding the line against the usual seasonal slowdown. Transactions saw a 1% month-on-month increase, defending against the drop the festive period usually dictates. This suggests the tentative momentum we saw building in November has managed to weather the winter chill, showing surprising resilience at the tail end of a turbulent year.”
“In the residential sector, affordability constraints and mortgage pricing continued to dictate the pace of play right up to the year-end. While November showed signs of the market testing the water, December’s figures remind us that consumer confidence is still fragile. Buyers are entering 2026 with a sense of cautious optimism, waiting for definitive signs of economic stability before committing to major financial decisions.”
“December is often a race to the finish line for corporate deals, but the broader picture remains one of selective investment. The appetite is there, but high financing costs mean investors are scrutinising the long-term fundamentals of every asset more intensely than ever.”
“As we look into the first quarter of 2026, the overarching theme remains the same: the market craves certainty. Pent-up demand is building, but activity will continue to come in fits and starts until we get a stable economic and political runway.”
“For the property industry, January is the time to prepare for this returning demand. Law firms and conveyancers who used the December lull to audit their workflows, integrate AI, and digitise their due diligence will be the ones winning market share as the spring pipeline builds. The market might be in a seasonal freeze, but the firms that act now will be first out of the blocks in the new year.”
Tom Bill, head of UK residential research at Knight Frank: “Transaction activity in December was in line with the five-year average as certainty following the Budget meant deals went through before Christmas. However, fresh activity in the form of mortgage approvals fell, which signals a relief bounce rather than a more meaningful spike in demand. The market in January started well but recent upwards pressure on borrowing costs means the outlook for this year feels finely-balanced. The absence of political drama over the next few months would help confidence, but that feels like wishful thinking.”
Iain McKenzie, CEO of The Guild of Property Professionals: “HMRC figures show a market that is regaining its footing. Residential transactions in December running 5–7% higher than a year ago underlines that activity remained resilient despite the uncertainty that characterised the final quarter of 2025. While volumes were broadly flat compared to November on a seasonally adjusted basis, the year-on-year improvement is a clear sign that confidence was already starting to return.
“We’ve seen that momentum carry into the start of this year. Many buyers who paused their plans ahead of the Autumn Budget have since re-entered the market, encouraged by greater stability, easing mortgage rates and the Bank Rate cut to 3.75% in December. Inflation remains a bump in the road and will keep the Bank of England cautious, but competition between lenders is continuing to work in buyers’ favour, with mortgage choice now at its highest level in nearly two decades.
“For first-time buyers in particular, affordability is still stretched, but lower mortgage rates combined with rising incomes mean mortgage costs as a share of income are at their lowest for several years. At the same time, a growing number of homes coming to market is giving buyers more choice and helping to keep house price growth in check.
“All of this points to the potential for higher transaction levels as we move through 2026. There is a clear desire to move, but success will depend on realism. Sellers who price sensibly and reflect local market conditions will be best placed to take advantage of the improving sentiment and convert that demand into completed sales.”
Nick Leeming, Chairman of Jackson-Stops: “December’s HMRC data will largely reflect deals agreed before the November Budget. The figures are completion-based, so December’s data principally reflects transactions agreed in late summer or early autumn, rather than current market activity.
“Beneath the surface, buyer interest was strong in December 2025. Our branch data shows new applicant registrations up on the previous year, with some locations, particularly coastal markets, seeing numbers double. There was also a clear urgency to get deals agreed, suggesting buyers saw prime regional markets as good value and wanted to secure property at current prices.
“Looking ahead, buyer demand appears on course to return towards 2024 levels, supported by declining average mortgage rates and a more predictable borrowing environment. Buyers remain selective and value-driven – accurate pricing will be crucial in 2026. Well-priced homes attract strong interest, while over-ambitious pricing risks slowing a sale. Overall, the market is set for a modest, sustainable uplift, underpinned by improving demand, realistic pricing and available stock.”
Nathan Emerson, CEO at Propertymark: “Based on December 2025’s figures, it is encouraging to see that property transactions remained stable following the Autumn Budget. At a time when many households were concerned about rising living costs, this stability suggests that the Budget provided enough clarity for people to continue progressing with plans to buy or sell a home.
“The UK government has announced a range of measures designed to strengthen the housing market, including reforms to protect leaseholders from unfair ground rents and investment to increase the supply of homes through new development and social housing. These longer-term policies should help improve affordability and choice for consumers across England.
“That said, many buyers are still feeling the strain of higher borrowing costs. To ease wider cost of living pressures and encourage more market activity, inflation and interest rates will need to fall. This would help make mortgages more affordable and support greater confidence among those looking to move home.”
Richard Donnell, executive director at Zoopla: “Home buyers agreed housing sales at an increasing rate over 2025 building the largest pipeline of sales working their way to completion since the pandemic. This is why there were over 100,000 residential transactions in December 2025, up 5% on the year before.
“Zoopla data shows that 2026 has got off to a slower start than a year ago with slightly fewer buyers and new sales, but there are clear signs that momentum is building. There is a strong desire to move home, but buyers remain cautious and price sensitive.”
