TwentyCi’s Market Update showed that agreed sales volumes were down 8% year-on-year in both May and June, followed by a 5% fall in July and a 6% decline in August.
Over the first eight months of the year, sales agreed volumes are 5.4% lower than last year.
The firm said this contrasted with completed transaction data from HMRC, which showed a 5% annual rise in residential transactions in July. However, transactions are still 2.5% lower for the year to date when compared to 2025.
TwentyCi said this would dampen residential transactions in the final quarter of the year, impacted by muted buyer demand and higher swap rates putting pressure on mortgage affordability.
In recent weeks, a number of lenders have increased mortgage pricing in response to rising swap rates.
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The firm said the sales agreed data reflected a more timely picture of buyer demand and pointed to a weaker pipeline of transactions.
TwentyCi now predicts 1.16 million residential transactions for the year, 3.9% lower than the 1.21 million completions in 2025. Despite the fall, purchase activity would still be 5.6% higher than in 2024.
Colin Bradshaw, CEO of TwentyCi, said the housing market was showing 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,” Bradshaw said.
He said the decline in buyer demand every month since May would “inevitably feed through into completed transactions with a lag”.
Bradshaw said: “For mortgage lenders, this is an important signal that the apparent resilience in headline transaction volumes should not be taken as an indication that the market is strengthening.
“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.”
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In contrast, the flow of new homes coming to market has increased, with a 2.1% annual rise in newly listed properties for sale. This is also at its highest level in the last decade.
TwentyCi said rising supply and falling demand created a “more buyer-friendly market”.
There is also a divergence the demand-supply ratio for certain property types, with TwentyCi recording a 13.2% year-on-year fall in demand for flats, the largest decline.
The firm said that, coupled with mortgage affordability pressures, buyers would become more cautious as the year progressed.
