UK residential property transactions fell 5% in January, marking the first clear slowdown after several months of relative stability.
The latest National Statistics from HM Revenue & Customs show the provisional seasonally adjusted total for January 2026 reached 94,680.
That compares with 99,710 in December 2025 – a month-on-month fall of 5%. Year-on-year, activity was marginally lower, dipping by less than 1% from January 2025.
On a non-seasonally adjusted basis, transactions totalled 79,880 in January. This represents a sharper 24% drop from December and a 3% decline compared with the same month last year.
SIGNIFICANT FALL
HMRC said the January decrease is the first significant monthly fall since activity stabilised in summer 2025.
Despite the dip, volumes remain broadly in line with recent years. Seasonally adjusted transactions stood at 95,430 in January 2025 and 82,430 in January 2024, suggesting the market continues to track close to post-pandemic norms rather than signalling a wider downturn.
INDUSTRY REACTION
Nathan Emerson, CEO at Propertymark, says: “Despite an economy that still has challenges to overcome, it is reassuring to witness resilience in the number of completed housing transactions as we stepped into 2026, when looking at provisional seasonally adjusted figures.
“It has been pleasing to see Propertymark member agents report what has been an uplift in the number of first-time buyers completing on a property when comparing figures both month on month and year on year.
“We are starting to see many key elements of the housing market once again moving in better harmony, although there are still challenges to overcome. Earlier this month, we observed the rate of inflation dip downwards to 3%, giving hope the Bank of England may feel confident enough to potentially lower the base rate next month when the Monetary Policy Committee next meet.”
MARKET FRICTION
Colin Bradshaw, CEO at TwentyCi, says: “A marginal dip in transactions highlights the persistent friction in the market as we navigate the fallout of the 2025 fiscal changes. While the macroeconomic ‘noise’ is beginning to settle – with inflation finally tracking back toward the 2% target – the reality for many movers remains one of cautious affordability.
“This, coupled with the recently announced ‘Mansion Tax’, has created a natural cooling effect – particularly in premium properties where we’re seeing more buyer caution than other areas of the market.
“However, buyer enquiries in the mainstream remain robust, which suggests there is a significant amount of latent demand. Once the current political and inflationary uncertainty fully clears, this pause could quickly turn into a surge. For lenders, the year ahead remains one of significant opportunity as these hesitant buyers eventually ease off the brake with confidence.”
SUPPORTIVE BACKDROP
Iain McKenzie, CEO of The Guild of Property Professionals, says: “The latest HMRC property transaction data for January highlights a modest seasonal slowdown rather than any underlying weakness in the housing market.
“Encouragingly, the broader economic backdrop is becoming more supportive. Inflation has eased to 3% in the year to January, its lowest level since March 2025, and, while still above the Bank of England’s 2% target, the downward trajectory strengthens the case for a base rate cut in the coming months.
“Combined with wage growth and improving mortgage affordability, this is laying the groundwork for renewed momentum.
“We are already seeing lenders respond to market expectations, with mortgage rates trending downwards. More attractive deals, particularly for buyers with larger deposits, should help unlock pent-up demand and encourage movers who delayed decisions during the final quarter of 2025.
“While transaction volumes may have softened at the start of the year, the outlook for 2026 remains positive. With house prices forecast to rise by a modest 3.3% and supply levels increasing, buyers will benefit from greater choice and improved negotiating power.
“As confidence builds and borrowing costs continue to ease, we expect activity to strengthen through the spring and summer, with sales volumes picking up as the year progresses.”
SLIGHT COOLING
Nick Leeming, Chairman of Jackson-Stops, says: “January’s data shows the first notable dip in activity since the summer, suggesting a slight cooling in momentum. Buyers remain cautious following a period of instability towards the end of Q4 last year, which has tempered confidence across the market.
“Despite this, some completions have rolled over from H2 2025 and we should see these expressed in the data in the coming months.
“Momentum is building beneath the surface, particularly in northern markets. Our Alderley Edge branch, for example, saw exchanges double in January, showing that committed buyers are returning.
“Demand remains selective and value-driven. Homes priced accurately are attracting competitive interest and progressing to exchange, while over-ambitious pricing is likely to slow the sale process.
“The wider economic picture is becoming more supportive. Falling inflation and the prospect of a Bank of England base rate cut next month should ease borrowing costs and improve access to finance.”
LITTLE URGENCY TO COMPLETE QUICKLY
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “These numbers are always useful as they provide an overview of what’s happening in the whole market – not just mortgaged but cash sales too.
“The data is a little historic although interesting as it covers the period immediately after the Budget when uncertainty reigned, so ‘marginally lower’ transactions is a positive in our view.
“We are finding much the same. Most sales are proceeding and relatively few folding without good reason but increased choice means buyers are taking their time with little urgency to complete quickly.”
LEADERSHIP CHALLENGE
Tom Bill, Head of UK Residential Research at Knight Frank, says: “Transaction numbers were 5% below the five-year average in January as the impact of November’s Budget continued to reverberate.
“Activity should recover in coming months as plans put on hold are reactivated and mortgage rates head lower.
“However, a Labour leadership challenge would cause another period of uncertainty and hesitation in the housing market, a prospect that appears almost inevitable after the by-election result in Gorton and Denton.”
TURNED A CORNER
Jason Tebb, President of OnTheMarket, says: “Although this transaction data reflects the uncertainty created by pre-Budget speculation, resulting in a particularly challenging period for the housing market, that is now behind us. On the ground there is evidence that the market has turned a corner.
“Post-Budget clarity, combined with lower mortgage rates, should lead to an improvement in transaction numbers which are a better indicator of the overall health of the housing market than prices.
“The increase in sellers bringing their homes to market this spring will keep prices in check to an extent, which will further assist first-time buyers and boost transactions. A further interest rate cut, perhaps even this month, will strengthen the market and encourage those planning to move, enabling them to plan ahead with more confidence.”
ACTIVITY PICKING UP
Amy Reynolds, Head of Sales at Richmond estate agency Antony Roberts, says: “Although not yet reflected in the official data, which is a little dated, transaction levels are starting to reflect improving confidence among buyers and sellers.
“While volumes have been subdued compared to more buoyant years, we’re seeing activity pick up as committed buyers re-enter the market.
“There is clear pent-up demand from those who paused decisions last year, and many are now keen to move before conditions shift again. As a result, agreed sales are increasing and well-priced properties are attracting competition.”
MODERNISE PROPERTY DATA ECOSYSTEM
Maria Harris, Chair of the Open Property Data Association, says: “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 estate agents, lenders, brokers, 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.
“That is why establishing a smart data trust framework for the property sector is crucial. A secure, governed trust model will enable trusted participants to access standardised, interoperable, digitised data in real time. This would reduce fall-through rates, cut transaction times, improve fraud mitigation, and enhance transparency for consumers.
“A well-designed smart data framework would not only support higher transaction volumes but make the system more resilient, efficient, and equitable. As the market gathers momentum, now is the moment to ensure our property data infrastructure is fit for purpose and ready to support sustainable growth.”
