Property transactions fall 4% as approvals slide and price growth stalls

The latest housing market data points to a market losing momentum. Transactions, mortgage approvals and house price growth have all weakened in the run-up to, and immediately after, the Autumn Budget.

Transactions down 4% on last year

UK residential property transactions fell to a provisional 94,800 in September, according to HMRC. That is 4% lower than September 2025 and slightly down on August's revised figure of 95,300.

Before seasonal adjustment, transactions totalled 97,940, up 1% on August but 5% lower than a year earlier. Non-residential transactions were broadly stable at 10,160.

HMRC's figures count completed sales worth £40,000 or more, and completions usually follow an accepted offer by two to four months. September's numbers therefore largely reflect deals agreed over the summer.

Purchase approvals fall for a third month

Bank of England figures point to further weakness ahead. Mortgage approvals for house purchases, an early indicator of future sales, fell to 53,400 in September from 54,800 in August, well below the six-month average of around 58,800.

That is the third monthly fall in a row and below July's figure of 56,100, which was itself the lowest since January 2024. It also compares with 65,900 approvals in September last year, a drop of around 19%.

Borrowing has also become more expensive. The effective rate on newly drawn mortgages rose to 4.63% in September, up from 4.19% a year earlier. Net mortgage borrowing slowed to £3.9bn, from £4.2bn in August.

The one area of growth was refinancing. Approvals for remortgaging with a different lender jumped from 34,000 to 42,600, suggesting more borrowers are shopping around as rates rise.

Price growth at its weakest since early 2024

Nationwide's index shows annual house price growth slowed to 0.5% in October, the weakest rate since January 2024 and down from 0.8% in September. Prices were flat on the month, after a 0.3% fall in September, with the average UK home costing £273,566.

Nationwide chief economist Robert Gardner said economic uncertainty and expectations of Bank Rate rises had kept upward pressure on the market rates that drive mortgage pricing. He pointed to weak new buyer enquiries and falling consumer confidence as signs of further softness in the near term. However, he said strong employment, rising real incomes and healthy household finances should support a recovery once the energy shock eases.

A buyers' market in the South

In much of southern England, buyers are spoilt for choice.

Jonathan Hopper, chief executive of Garrington Property Finders, said sellers in much of the South are competing hard just to secure viewings. He added that disciplined buyers are focusing on the price they actually pay, rather than the size of any discount from an ambitious asking price.

Mark Harris, chief executive of SPF Private Clients, said affordability, pre-Budget nerves and volatile swap rates had all weighed on activity. Jeremy Leaf, a north London estate agent and former RICS residential chairman, said some buyers and sellers who paused before the Budget are now cautiously returning. However, he warned that the wait for the Your First Home scheme, due to support its first sales in April 2027, may hold back first-time buyers in the meantime.

Tomer Aboody, founding director of MT Finance, noted that while private landlords are leaving the market, buyers purchasing through companies are becoming more common as investors restructure.

What it means for bridging

Slower sales and softer prices have direct implications for short-term lending.

Bridging loans that rely on a sale to repay face longer marketing periods and tougher price negotiations. That supports the shift some lenders have made towards preferring refinance exits, and puts more weight on realistic sale prices and timeframes at the start of a deal.

At the same time, a buyers' market creates opportunities. Motivated sellers mean more below-market-value purchases, chain breaks and properties needing refurbishment, all of which suit fast, flexible finance.

The surge in remortgaging and the move by landlords towards company ownership point to continued demand for refinancing and restructuring. Developers waiting for Your First Home to launch may also need development exit finance to hold completed stock until next spring.