Seasonally adjusted residential property transactions fell to 96,710 in July 2026, down from 98,390 in June and 1% lower than the same month last year.

While activity remains above the levels seen during parts of 2023 and early 2024, the figures suggest the market has yet to establish a sustained recovery.

Mark Cunningham, Partner, commented:

While borrowing costs, wider cost of living pressures and political and economic uncertainty have all weighed on market activity, the cost of moving itself has become an increasingly important consideration. Rising property values and frozen SDLT thresholds have resulted in a larger tax burden on most transactions, increasing the overall cost of moving

Frozen thresholds are increasing the cost of moving

Stamp Duty Land Tax (SDLT) is charged when people purchase property above certain thresholds. When those thresholds remain unchanged while property prices rise, more buyers can find themselves paying tax or paying more tax even where their purchasing power has not increased significantly.

This creates an additional upfront cost at precisely the point when households are already weighing higher mortgage costs and wider living expenses.

The effect is not limited to individual buyers. A subdued residential market can have broader economic consequences, affecting estate agents, conveyancers, mortgage providers, surveyors, removal companies, home improvement businesses and other parts of the property supply chain.

HMRC’s latest transaction figures suggest the housing market continues to struggle to gain any significant momentum. The seasonally adjusted number of residential transactions fell to 96,710 in July 2026, down from 98,390 in June 2026 and 1% lower than July last year.

Encouraging transactions could support wider housing ambitions

The Government’s housing ambitions have largely focused on increasing supply and delivering more homes. However, building new properties is only one part of a functioning housing market.

A healthy market also depends on existing properties changing hands, allowing people to move for work, family and financial reasons and creating opportunities for buyers further down the housing ladder.

While activity remains well above the levels seen during parts of 2023 and early 2024, figures suggest the market has yet to establish a sustained upward trend. SDLT will not be the sole reason transaction levels remain subdued, but it is one of the mechanisms available to the government to stimulate activity.

There is therefore a wider policy question: should SDLT be used more actively as a lever to encourage housing market activity?

The wider economic impact

Transaction taxes can influence behaviour because they make moving more expensive. This can be particularly significant for households considering whether to move to a larger or more suitable property, relocate for employment or downsize.

As a transaction tax it increases the upfront cost of moving and is therefore likely to influence behaviour, particularly at a time when household budgets remain under pressure.

For businesses, a less mobile housing market can also create indirect challenges. Employees may be less willing or able to relocate, while businesses operating across the property sector can face reduced demand when transactions slow.

The Government therefore faces a balancing act: SDLT provides a significant source of tax revenue, but reducing the burden could potentially unlock transactions and generate additional economic activity elsewhere.

What could the Government do?

With housing remaining a key policy priority, there is a case for looking beyond the number of new homes being built and considering the factors preventing existing homes from being bought and sold.

At a time when housing remains a key policy priority, there is a strong argument that encouraging transactions should form part of the Government’s strategy alongside increasing supply.

Any reform would need to consider the potential impact on both tax revenues and property prices. However, if SDLT is contributing to people delaying moves, policymakers may need to consider whether the current structure is achieving its intended economic objectives.

Mark concluded:

The property market does not just need homes to be built. It also needs people to move. If transaction levels remain relatively flat despite a more settled economic backdrop, attention should turn to barriers preventing transactions from taking place

What should you consider/do next?

For individuals: If you are considering buying or selling property, factor the SDLT cost into your overall budget rather than focusing solely on the purchase price. The tax position can materially affect the affordability of a move.

For businesses: Employers with geographically mobile workforces should be mindful that property transaction costs can affect employees’ willingness to relocate. Businesses operating within the property and construction ecosystem should also consider how subdued transaction volumes could affect demand.

The July figures suggest that simply building more homes may not be enough. If the Government wants a more dynamic housing market, reducing the barriers to moving may need to become part of the solution.

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.