UK property transactions showed signs of stabilisation at the end of 2025, according to the latest figures from HM Revenue & Customs, offering tentative reassurance for developers and funders assessing pipeline risk heading into 2026.
The provisional seasonally adjusted estimate for residential transactions in December 2025 stood at 100,440, marginally lower than November but 5% higher year-on-year, suggesting activity has levelled out following months of distortion caused by stamp duty changes earlier in the year.
The data reflects a market that has moved past the volatility created by buyers rushing to complete ahead of changes to stamp duty land tax thresholds introduced in April 2025. With those incentives now largely priced in, transaction levels are beginning to normalise.
On a non-seasonally adjusted basis, transactions increased to 105,730 in December, up 1% month-on-month and 7% higher than a year earlier. HMRC said activity has remained broadly stable since summer 2025, following a sharp pull-forward of demand at the start of the 2025–26 financial year.
For developers and lenders, the stabilisation is viewed as a clearer signal of underlying market demand, removing some of the noise that has complicated viability assessments and exit assumptions over the past year.
SHIFT FROM VOLATILITY TO CONSISTENCY
The fading impact of tax-driven demand has reduced month-to-month volatility, revealing a housing market operating at a consistent, albeit subdued, pace. While volumes remain below previous cycle highs, the absence of sharp swings is likely to be welcomed by funders seeking greater certainty around transaction timing.
Tomer Aboody, director of specialist lender MT Finance, said transaction figures suggested a market still finding its footing rather than fully committing to growth.
Although headline numbers appear to be improving, he said both buyers and sellers remain cautious, with confidence still fragile across large parts of the market.
Tomer Aboody, director of specialist lender MT Finance, said transaction figures suggested a market still finding its footing rather than fully committing to growth.
Although headline numbers appear to be improving, he said both buyers and sellers remain cautious, with confidence still fragile across large parts of the market.
PIPELINE PRESSURES EMERGE
Richard Donnell, executive director at Zoopla, said housing sales agreed through 2025 had created the largest pipeline of transactions moving towards completion since the pandemic, helping explain why December recorded more than 100,000 completions.
However, he noted that early data for 2026 pointed to a slower start than a year earlier, with fewer new buyers and sales agreed, even as longer-term momentum appeared to be rebuilding.
For development finance providers, this divergence between pipeline strength and new activity reinforces the importance of realistic exit planning and contingency funding, particularly for schemes reliant on open-market sales.
SLOW, MEASURED RECOVERY
Hamza Behzad, business development director at Finova, said the figures suggest a cautious market rather than one that is stalling outright.
He said confidence is rebuilding gradually, but most indicators point towards a slow and measured recovery rather than a sharp rebound, with forecasts continuing to suggest low single-digit house price growth through 2026.
For development finance, this environment reinforces the focus on scheme fundamentals, conservative assumptions and careful cost control, particularly as funding costs remain elevated.
CERTAINTY STILL ELUSIVE
Andrew Lloyd, managing director at Search Acumen, said December’s figures showed the market holding up against the usual seasonal slowdown, suggesting tentative momentum had carried through into the year-end.
However, he said broader conditions still point to selective investment rather than widespread risk-on behaviour, with investors scrutinising long-term fundamentals more closely amid higher financing costs.
He added that the overriding theme remains a desire for certainty, with pent-up demand building but likely to be released unevenly until economic and political conditions stabilise.
