Latest HMRC property transaction figures for November and December point to a subdued residential and commercial market, reinforcing wider concerns about economic confidence as the UK moves into 2026.

What the data shows

HMRC’s statistics indicate that residential property transactions remained broadly flat through the final two months of the year.

As Mark Cunningham, Partner, explains:

HMRC’s latest property transaction statistics reinforce the message that households were hesitant to commit to major financial decisions leading up to the Autumn Budget in late November. Commercial property transactions also reflect a subdued market.

Residential completions for both November and December remained broadly flat on a seasonally adjusted basis. The December figure of 105,730 transactions is essentially unchanged from November once seasonal effects are removed.

This stability may appear reassuring at first glance, but it also signals a lack of momentum at a time when policymakers are keen to see activity pick up.

Commercial property as an economic bellwether

Commercial property transactions are often reliable indicators of broader economic confidence. Q4 2025 saw 32,840 transactions compared with 34,050 in Q4 2024, indicating that take up was weak around the time of the Budget. Whether purchased for operational use or investment, appetite for commercial property remained soft. Showing a wider economic caution across the UK economy.

For businesses, this hesitancy reflects more than just property pricing. Decisions to expand office space, invest in logistics hubs, or acquire retail sites are closely tied to expectations around demand, financing costs and workforce stability.

Why any recovery will take time

Any uplift from the removal of uncertainty following the Budget would only be expected to emerge in the data over the coming months. The lead time from an offer being accepted to legal completion means that the earliest signs of renewed confidence will not appear until early 2026.

This lag matters for businesses planning investment decisions. Short-term data may continue to look weak even if sentiment improves behind the scenes.

Implications for housebuilding and supply

The subdued market is particularly challenging for house builders, who are under pressure to increase supply while contending with difficult market conditions.

House builders continue to battle against low demand, stagnant prices and high development costs, all of which limits progress towards the governments new build targets. Without a clear shift in buyer sentiment or greater support, build rates are likely to remain subdued.

The wider economic backdrop

Property market caution does not exist in isolation. Elevated unemployment, lingering cost-of-living pressures and slowly falling interest rates all contribute to a fragile outlook.

Mark concludes:

With unemployment elevated, concerns about job security persisting, the cost of living remaining high, house prices showing little movement, and interest rates slow to fall, optimism for a significant acceleration in transactions or building activity remains low.

Together, these factors help explain why both individuals and businesses remain cautious about committing capital.

What you should consider or do next

Plan for delayed signals: Do not rely solely on short-term transaction data when assessing market direction; confidence shifts may only become visible in 2026.

Stress-test investment decisions: Factor in continued economic caution, particularly around financing costs and demand assumptions.

Review property strategies: Businesses should reassess whether leasing, purchasing or delaying decisions best aligns with operational needs in an uncertain market.

Monitor policy developments: Future government support or housing measures could materially change sentiment, especially for developers and investors.

Would you like to know more?

If you have any questions about the above, please get it touch with your usual Blick Rothenberg contact or Mark using the form below.