Agreed sales, approvals and completions all point the same way as borrowing costs bite
Residential property completions fell sharply in August, according to provisional HMRC figures, with non-seasonally adjusted transactions down 9% on the year and 11% on the month to 96,250.
On a seasonally adjusted basis, completions came in at 95,220, down from 97,040 a year earlier and 1% below July's 96,650 – a more modest decline that strips out typical seasonal patterns but still points to a market losing momentum.
HMRC noted that completions typically follow an initial offer by two to four months, meaning August's figures largely reflect deals agreed in the spring, before the latest round of rate rises had fully taken hold.
Year-to-date, residential completions for April to August reached 486,950 on a non-seasonally adjusted basis and 488,540 seasonally adjusted – around 10% and 11% above the same period of 2025-26. That earlier period was distorted by a sharp fall in April 2025, when buyers brought sales forward ahead of stamp duty land tax threshold reductions.
Non-residential transactions were broadly stable at 10,220 seasonally adjusted, while unadjusted completions fell 17% monthly and 5% annually to 9,080, the lowest August figure since 2020.
Rates rising through the summer
The HMRC figures sit alongside broader evidence of a market under pressure. Bank of England data showed mortgage approvals for house purchase fell to 54,900 in August, the lowest since December 2023 and below the previous six-month average of around 60,100.
Zoopla reports agreed sales 9% lower in the four weeks to 20 September, with declines recorded in every UK region and country. Fixed rates have climbed sharply since the start of the year, with the average rate on a 75% LTV five-year fix reaching 5.2% at the end of September, up from 4% in January – adding around £150 a month to a typical buyer's repayments.
Richard Donnell, executive director at Zoopla, said housing sales are slowing as higher mortgage rates add to the cost of buying. "There remains demand for housing but sellers looking to find a buyer need to set their price carefully and seek the advice of local agents," he said.
Melanie Spencer, growth director at Target Group, said mortgage rates have risen sharply since the start of the Iran conflict as lenders react to volatility in swap rates. "Mortgage pricing remains highly volatile and with the Bank of England looking set to break from its holding pattern and inflation still above target, there looks to be little relief on the horizon," she said.
The Monetary Policy Committee held the base rate at 3.75% on 17 September in a 6–3 vote – its sixth consecutive hold – with three members voting for a rise to 4%. The next decision is due on 5 November.
Brokers feeling the squeeze
Ryan McGrath, director of second charge mortgages at Pepper Money, said the figures fit with the caution brokers have been describing for some time. "Borrowers hoping for cheaper mortgages are having to rethink their plans. Many who locked in lower rates a couple of years ago still see little reason to move," he said.
Budget adds to uncertainty
Nathan Emerson, chief executive of Propertymark, said many prospective buyers and sellers have adopted a cautious approach against a backdrop of continued financial pressures. "While there remains clear underlying demand for housing, affordability and confidence continue to play an important role in determining whether people feel ready to move forward with a transaction," he said.
With Chancellor John Healey expected to confirm details of the Your First Home equity loan scheme at the Autumn Budget on 28 October, Emerson added that any measures helping first-time buyers onto the housing ladder would be particularly welcome.
