The housing market is showing “increasing signs of weakness” as the number of properties reaching sales agreed has fallen 5% year-on-year for the last four months.
According to the latest market update from TwentyCi, data points to a “weaker” Q4 as buyer demand remains subdued and rising swap rates put renewed pressure on mortgage affordability.
The property data and insight company reports sales agreed volumes were down around 8% year-on-year in both May and June, followed by a 5% decline in July and a 6% decline in August. Overall, sales agreed volumes are down 5.4% year-on-year in the first eight months of 2026.
The picture contrasts with the latest completed transaction data, which shows a more resilient picture: HMRC recorded 5% year-on-year growth in residential transactions in July, although transactions remain 2.5% lower year-to-date compared with 2025. TwentyCi’s sales agreed data provides a more current indication of buyer demand and signals a weaker pipeline of transactions heading into the final quarter.
Echoing expert commentary made following the latest UK House Price Index from ONS, the company says the divergence highlights “the importance of looking beyond completed transactions, which reflect activity agreed several months previously”.
TwentyCi forecasts 1.16 million residential transactions for 2026, representing a 3.9% decline on the 1.21 million transactions recorded in 2025 – although volumes will remain 5.6% higher than in 2024.
The latest data comes as renewed volatility in financial markets puts further pressure on mortgage pricing.
Rising swap rates, driven by the global bond market sell-off, higher oil prices and renewed inflation concerns, have already prompted some lenders to increase fixed-rate mortgage pricing despite no change in Bank Rate, the data company reveals.
With fixed mortgage rates more closely linked to swap rates than Bank Rate, the latest increase in wholesale funding costs could create a further affordability headwind for prospective buyers.
This is “particularly significant”, TwentyCi says, given that the company’s data already points to a more cautious buyer environment, with mortgage affordability constraints and wider economic uncertainty contributing to the fall in sales agreed.
Colin Bradshaw, CEO at TwentyCi, said: “The housing market is presenting something of a mixed picture. On the surface, the latest transaction figures suggest that activity remains relatively resilient, but when we look at the more timely sales agreed data, a different story is emerging.
“Buyer demand has fallen by more than 5% year-on-year in every month since May, and that sustained weakness will inevitably feed through into completed transactions with a lag.”
Bradshaw added that this data is an “important signal” for mortgage lenders that the apparent resilience in headline transaction volumes should not be taken as an indicator of a strengthening market.
He added: “The renewed rise in swap rates adds another layer of uncertainty. If fixed mortgage pricing continues to move upwards, it could put further pressure on affordability and make buyers even more cautious at a time when demand is already subdued.
“The direction of the market over the next few months will therefore be particularly important for lenders to watch.”
Meanwhile the supply of homes coming onto the market continues to increase, with data showing the number of newly listed properties for sale as 2.1% higher year-on-year – its highest level in the last 10 years.
The combination of rising supply and falling demand is creating a more buyer-friendly market, the company says, and demand-to-supply ratio has deteriorated across every major property type, with flats seeing the largest decline at 13.2% year-on-year.
