The latest figures from HMRC have revealed a fall in both residential and commercial property transactions, hinting at a potential slowdown that could be more than just a seasonal blip. The decline could signal weakening confidence among buyers, a concern for Chancellor Rachel Reeves as she prepares her first Autumn Budget.

Heather Powell, Partner at Blick Rothenberg, said:

HMRC’s latest sales figures for residential and commercial properties show a fall in the seasonally adjusted sales for both residential and commercial properties. Which could be a concerning sign for Rachel Reeves as she prepares for the Autumn Budget.

According to HMRC’s latest data, the number of residential transactions in August 2025 fell by 2% from July  from 95,240 to 93,630, while commercial transactions dropped to 9,910, down 3% on the previous month and 2% on August 2024. Heather points out that these numbers follow three months of modest gains, suggesting the market’s brief recovery may already be running out of steam.

This could represent a drop in confidence after a summer of leaks and conjecture about tax increases in the November Budget,” she said, “or it could be a sign of a bigger problem as families and businesses become more concerned about their long-term outlook.

The implications extend far beyond the monthly figures. Property purchases are, by nature, long-term commitments underpinned by confidence in job security, business growth and future earnings. As Heather notes:

The purchase of a property is a long-term investment and is driven by confidence in future earnings, job security and, for a business, ongoing demand for their products and future profits. If families and businesses don’t have that confidence they won’t buy.

Sentiment Stalls as Policy Uncertainty Mounts

Across the market, that confidence is showing strain. The Royal Institution of Chartered Surveyors (RICS) recently reported a decline in buyer inquiries and agreed sales, with surveyors warning of further weakness ahead of the Budget. Meanwhile, high-value buyers are pausing. According to Zoopla, demand for homes priced over £1 million is down 11% year on year, as speculation over stamp duty reform and new wealth taxes triggers hesitation.

Even though Nationwide data shows house prices rose 0.5% in September, a modest rebound after summer softness, underlying momentum appears fragile. The Financial Times reports that commercial landlords are facing similar headwinds, with businesses delaying expansion or relocation decisions amid uncertainty over future policy and slower economic growth.

The risk for the Chancellor is that this hesitation could translate into lower transactional activity, reduced tax receipts and weaker growth. Heather says Reeves must focus on action rather than rhetoric:

While the Chancellor has made lots of statements about growing the UK economy, including in her Labour Party conference speech, there is little evidence that these statements are being translated into policies that generate growth. Rachel Reeves and the Government must focus on policies in the Autumn Budget and during the forthcoming year that are then implemented to generate the growth that is needed.

The Market Divide: Resilience vs. Retreat

While parts of the property market remain under pressure, others continue to perform. Prime commercial assets, particularly in central London, are holding up well. Landsec recently reported a 6.6% rise in rental income across its London portfolio, showing that quality and location still matter. At the same time, large developers such as Barratt Redrow have warned that uncertainty over possible Budget tax changes is beginning to affect buyer behaviour, with potential purchasers holding back to see what happens next.

These mixed signals reflect a market searching for direction. Rising costs of borrowing, ongoing tax speculation and patchy consumer confidence are weighing on sentiment, while the shortage of housing stock and the enduring appeal of UK real estate to global investors provide a floor to prices  – for now.

Risks and Opportunities for Investors

For investors and property owners, the current environment calls for clear-headed analysis rather than panic. Liquidity risk is rising , assets may take longer to sell or require price reductions, while holding costs are increasing as interest rates and insurance premiums stay elevated. Tax exposure also looms large, with possible reforms to stamp duty, capital gains treatment and annual levies on property ownership all under discussion.

Commercial landlords face additional challenges. Weaker tenant demand, potential rises in vacancy rates and the difficulty of refinancing at higher interest rates could test portfolios over the next 12 to 18 months. Yet, opportunities remain: prime offices, logistics and mixed-use assets with strong tenant covenants continue to attract interest, and repurposing under-used assets such as converting offices to residential — can unlock value.

What Property Owners Should Do Next

Whether you are a private investor, a commercial landlord or a high-net-worth buyer, the key now is to prepare, not to pause. Stress-test your holdings for lower valuations and higher costs. Review your financing particularly any loans maturing in the next two years and, where possible, secure favourable terms early. Focus on the resilience of your income stream by retaining quality tenants and optimising lease terms.

Those looking to acquire should stay alert for opportunities created by short-term uncertainty. Well-located, income-producing assets may become available at attractive prices, particularly if others retreat. Finally, stay close to developments in the Autumn Budget and seek professional advice to assess how any forthcoming tax reforms could affect your holdings or future purchases.

Confidence drives the property market, but in periods of uncertainty, preparation and agility create the advantage. For investors willing to look beyond the headlines, today’s hesitation could prove tomorrow’s opportunity.

Would you like to know more?

Get clear, practical guidance tailored to your portfolio before the Autumn Budget brings new announcements. If you’d like to discuss the above, please speak to your usual Blick Rothenberg contact or Heather Powell using the form below.