Estate agents face a tougher end to the year as rising mortgage costs squeeze buyers and sales activity continues to weaken.
New figures from HMRC show UK residential property transactions fell by 1% in September compared with August.
The seasonally adjusted total stood at 94,800, down 4% on September 2025.
On a non-seasonally adjusted basis, transactions increased by 1% month-on-month but fell 5% year-on-year.
The figures add to concerns about the housing market’s direction, with higher borrowing costs and economic uncertainty weighing on demand.
Buyers lose purchasing power
Richard Donnell, executive director at Zoopla, warned that higher mortgage rates were having a significant impact on buyers.
He said: “The latest figures show UK residential transactions in September 2026 were 4% lower than a year ago, reflecting the changing pace of activity in the housing market. Higher mortgage rates over the summer and this autumn have seen a 15% hit to buying power for those using a mortgage.”
Donnell said the slowdown was also becoming apparent in more recent sales activity.
“Sales agreed in the last 4 weeks are also 7% lower than a year ago as buyers become more selective and adopt a wait and see approach.”
Zoopla now expects 100,000 fewer housing transactions this year compared with 2025.
Asking prices under pressure
Nick Leeming, chairman of Jackson-Stops, said the traditional autumn recovery had failed to gather momentum.
He commented: “While September traditionally sees the market regain some momentum after the summer, activity this year appears to have remained subdued, with sales 4% lower than same period in 2025. Uncertainty surrounding the Budget and wider economic conditions continue to influence buyer confidence.”
Leeming warned that buyers were becoming increasingly selective.
“Demand is still present, but buyers are increasingly selective about what they are prepared to pay. For sellers, setting a realistic asking price from the outset, informed by recent local sales and current competition, remains essential to securing a successful sale.”
His comments suggest agents may need to manage vendor expectations carefully as the market approaches Christmas.
Interest rate uncertainty adds to concerns
Ian Harris, president of NAEA Propertymark, said affordability remained a major obstacle.
He commented: “Across the year to date, the housing market has been navigating a period of buyer caution and affordability concerns.”
Although the Budget had provided some policy clarity, Harris warned that uncertainty remained over borrowing costs.
“However, with inflation creeping upwards again and speculation surrounding the direction the Bank of England may take regarding the base rate next week, there are still important considerations for consumers to review in terms of how this may affect their confidence and affordability moving forwards.”
Jason Tebb, president of OnTheMarket, also highlighted the pressure from mortgage pricing.
He said: “The Bank of England’s decision to hold interest rates steady so far this year has helped confidence but higher mortgage rates, on the back of volatility in Swap rates, have squeezed affordability.”
Little sign of a sustained recovery
The latest figures suggest the housing market remains under pressure despite government measures aimed at supporting first-time buyers.
While transactions rose slightly on a non-seasonally adjusted basis in September, annual activity remained lower.
With mortgage costs continuing to restrict borrowing power, agents face the prospect of slower sales and more difficult negotiations during the final months of 2026.
