UK property transactions experienced a substantial 41% fall in March 2026 when compared to the same month in 2025, according to the latest figures released by HM Revenue & Customs (HMRC). This sharp annual decline is largely seen as the market normalising after a significant rush in activity last year, driven by the impending deadline of stamp duty changes. Despite this steep drop, the number of transactions remains 5% above the five-year average, suggesting a return to more typical market conditions rather than a collapse.
The previous year saw a surge in property purchases as buyers sought to complete transactions before the stamp duty holiday or other incentives concluded. This created an artificially inflated level of activity, making the year-on-year comparison appear more dramatic. Analysts suggest that the current figures reflect a more sustainable pace for the UK housing market.
Contextualising this, recent data from property portals like Rightmove and Zoopla indicates that while the pace of transactions has slowed, average house prices continue to show resilience, albeit with regional variations. For instance, while some areas in the North of England might still be experiencing modest price growth, parts of London and the South East could be seeing flatter or even slight declines in average values. This uneven performance is a characteristic of the post-pandemic market, influenced by factors such as affordability and local economic conditions.
Mortgage rates also play a crucial role in the current market landscape. While not at their peak, interest rates remain higher than the historically low levels seen in previous years, impacting affordability for prospective buyers. Lenders are offering a wider range of products, but the cost of borrowing continues to be a significant consideration for many. This, combined with the normalisation of transaction volumes, contributes to a more cautious approach from both buyers and sellers.
Looking ahead, the market is expected to continue its adjustment. While the dramatic year-on-year drops in transactions are likely to ease as the comparison period moves beyond the stamp duty rush, the underlying fundamentals of supply, demand, and economic stability will dictate the trajectory of the UK property market. Regional disparities in price movements and transaction volumes are also anticipated to persist.