Heather Powell, Head of Property & Construction, comments:

There is no evidence of any confidence in the market or a hunger for the purchase of the 1.5m homes the Government continues to quote as the target for delivery of new homes before August 2029.

Residential market: caution outweighs aspiration

The statistics report the purchase of 103,330 homes, which is 3% lower than November 2024. This reflects the confidence of individuals and families. While interest rates have dropped slightly, there continue to be major worries about job security and the cost of living.

Buying your first home, or moving up the housing ladder, is a major expense, and one that many are ‘pushing back’ on the basis of ‘let’s see what the year will bring’. House prices are not increasing significantly; in some areas in the South East, they are falling slightly, which is another incentive to hold back.

This creates a feedback loop: subdued demand limits price growth, which in turn reduces urgency for buyers to act.

Policy ambition versus delivery reality

While the Government are relaxing planning legislation, and pushing forward with the development of new towns, the concerns of the house builders about capacity within the sector to actually build the homes and the ability of families to buy the homes built for sale, has to be addressed by the Chancellor if significant numbers of new homes are going to be built.

Developers ultimately respond to demand and profitability, not targets. No developer is going to build homes that they cannot sell at a profit.

Without stronger buyer confidence underpinned by stable employment, manageable living costs and accessible finance – housing delivery risks falling short of expectations.

Commercial property: a deeper economic signal

While residential figures attract public attention, the commercial property data may be an even more telling indicator of economic health. HMRC reports 11,240 commercial property sales in November 2025 – down 1% on October but 12% higher than November 2024.

At first glance, the year-on-year increase offers some reassurance. However, activity remains subdued relative to what would be expected in a growth environment.

Commercial properties are the infrastructure of our economy and property sales occur when investors are confident that the businesses will pay their rents on time, that rents will rise in line with inflation, and that businesses will thrive.

In a growing economy, rising demand for offices, warehouses and logistics space typically fuels transaction volumes. The absence of a clear upsurge suggests that businesses remain cautious.

Heather concludes:

These signs are missing at the moment as businesses grapple with increased labour costs, increased overheads and a lack of demand from consumers who are focussing on building up their savings, not spending.

Why this matters for businesses and individuals

Property markets do not operate in isolation. Weak transaction levels can slow construction activity, dampen investment and restrict labour mobility. For businesses, this can mean fewer opportunities to expand or relocate. For individuals, it reinforces uncertainty around wealth, affordability and long-term financial planning.

Perhaps most importantly, confidence, once lost, is slow to rebuild. The current data signals a pause rather than a collapse, but prolonged hesitation risks becoming entrenched.

What you should consider or do next

Businesses should factor property market caution into expansion and investment plans, stress-testing assumptions around demand, rental growth and financing costs.

Developers and investors may need to reassess project timing and pricing strategies in light of subdued buyer confidence.

Employers should recognise the link between job security perceptions and economic activity, including housing demand.

Individuals and families may benefit from reviewing long-term affordability and resilience, rather than relying on short-term interest rate movements.

Would you like to know more?

If you’d like to discuss the above, please speak to your usual Blick Rothenberg contact or Heather Powell using the form below.