27 February 2026
If you are covering the latest property transaction data, please see the following comment from Ian Futcher, financial planner at Quilter:
Residential transactions ended the year on a steady footing and the market now looks increasingly sensitive to what happens with mortgage pricing over the coming months. December’s seasonally adjusted total slipped by less than 1% on the month to 100,440 but remained 5% higher than a year ago, which is broadly consistent with the stable pattern we have seen since the summer. The non seasonally adjusted figures tell the same story, rising 1% on the month and 7% on the year, despite stretched affordability.
The direction of mortgage rates is now central to whether residential activity can break out of this tight range. Lenders have already been trimming fixed‑rate deals in anticipation of Bank of England cuts later this year, and the market is increasingly priced for a gradual easing cycle. If inflation continues to cool, there is a realistic prospect that average mortgage rates could drift lower through the spring and summer. That would gradually improve affordability and could release some of the pent up demand that has been sitting on the sidelines since early 2024.
For now, though, households remain cautious. Buyers are waiting for clearer evidence that further rate cuts are approaching and that any downward momentum in mortgage pricing will be sustained rather than tactical. The resilience in December’s numbers suggests transactions are being driven by need rather than opportunism, but an improving rate outlook would provide exactly the confidence boost required to lift activity out of its holding pattern.
The opportunity for the market in 2026 is that even modest reductions in mortgage rates would have a disproportionate confidence effect after two years of elevated borrowing costs. If the rate path moves in the direction many expect, today’s stability could finally tilt into a gentle recovery.
