Market remains subdued to start the year, yet easing rates and sentiment hint at gradual recovery ahead
Property transactions declined at the start of 2026, with both residential and commercial activity easing back in January, according to figures from HM Revenue & Customs (HMRC).
On a seasonally adjusted basis, there were 94,680 residential transactions in January 2026. This was slightly below the level recorded in January 2025 and 5% lower than in December 2025.
Before seasonal adjustment, residential transactions totalled 79,880. That represented a 3% fall compared with January 2025 and a 24% drop from December 2025, underlining the typical year-end to new-year slowdown.
Non-residential activity also softened month on month. Seasonally adjusted non-residential transactions reached 9,960 in January, up 3% on January 2025 but 6% down on December 2025.
On a non-seasonally adjusted basis, there were 8,470 non-residential transactions, 2% lower than a year earlier and 28% below the previous month.
“The dip in transactions at the start of the year reflects a market that is still finding its footing,” said Ryan McGrath (pictured above left), director of second charge mortgages at specialist lender Pepper Money. “January data often carries the legacy of decisions made late last year, and in this case, it likely captures the caution we saw in the run-up to the Autumn Budget, combined with the usual seasonal slowdown around the turn of the year.
“Today’s data doesn’t yet fully reflect the improvement in sentiment that has followed greater clarity on rates and inflation. With price pressures easing and mortgage pricing gradually softening, the broader fundamentals are becoming more supportive, even if activity remains uneven month to month.”
At the agency level, some firms report that current activity on the ground is ahead of what the official data may suggest.
“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,” said Amy Reynolds (pictured above centre), head of sales at Richmond estate agency Antony Roberts. “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.”
Brokers are also pointing to lower mortgage pricing and the possibility of further rate cuts as factors that could support a gradual firming in activity through 2026.
“Lower mortgage rates continue to support activity in the housing market,” said Mark Harris (pictured above right), chief executive of mortgage broker SPF Private Clients. “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 [in March] have improved following recent economic data including rising unemployment, falling inflation and lacklustre GDP, which should provide a further boost for market activity.”
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