Home sales collapsed by 41 per cent in March when compared to the same month in 2025, according to HM Revenue & Customs (HMRC) data. The sharp decline is largely attributed to the end of Stamp Duty relief in April 2025, which prompted many buyers to complete transactions before the deadline.
In March 2026, 104,070 home sales were completed, representing a modest 1 per cent increase from February. However, the annual comparison highlights a dramatic slowdown in the housing market.
Market Resilience Amid Economic Pressures
Frances McDonald, director of research at Savills, commented: "March transaction data points to a degree of resilience in the UK housing market, as activity maintains momentum on long-term averages, despite ongoing economic pressures." She added that many sales were likely supported by buyers wanting to lock into mortgage offers before further rate rises, with many deals agreed prior to the conflict in the Middle East. "The true impact of the recent wave of uncertainty will likely become more apparent in the coming months, once mortgage offers prior to the conflict begin to expire," she warned.
Bank of England Holds Interest Rates
Homebuyers faced additional challenges as the Bank of England confirmed interest rates would remain at 3.75 per cent. However, the central bank signalled that higher rates could be implemented later this year, citing unavoidable higher inflation due to the war in the Middle East. Governor Andrew Bailey stated: "The war in the Middle East is causing inflation to rise again this year."
Chancellor Rachel Reeves released a statement following the announcement, describing the Iran war as "not our war, but it is one we have to respond to." She emphasised that every choice made would focus on keeping costs down for families and businesses without repeating past mistakes that led to higher inflation and interest rates. Reeves added: "We entered this conflict in a stronger position because of the choices this government took to build economic stability, and we are going further to take back our energy security."
The combination of falling sales and steady interest rates continues to weigh on the housing market, with experts predicting further uncertainty in the coming months.
