Bank of England Reports Continued Weakness Across UK Residential and Commercial Property

The UK's property industry continues to face a difficult operating environment, according to the Bank of England's latest Agents' Summary.

The September report described further softening in residential and commercial property markets, with estate agents reporting subdued activity, longer sales periods and continued pressure on prices in some regions.

What agents are reporting

The Bank's regional agents reported that transaction numbers were down on the previous year in some areas, with declines reaching double-digit percentages.

They also noted that sales were taking longer to complete and that demand for new-build homes remained weak as higher mortgage rates affected affordability.

These observations provide useful context for interpreting headline house-price figures.

A market can experience only modest price changes while still undergoing a significant reduction in the number of transactions.

The new-build sector faces additional pressure

Housebuilders are particularly exposed to changes in financing and buyer demand.

The Bank's report noted that developers were relying on bulk sales and incentives to support cash flow, while there was no expectation of an imminent increase in new-home supply.

This suggests that the new-build sector is facing a combination of affordability constraints and development challenges.

Commercial property is also affected

The report also highlighted pressure on commercial real estate development and investment.

High construction and finance costs, combined with planning and regulatory constraints, are affecting project viability.

This is significant because commercial property activity supports a wider network of businesses, including construction firms, professional advisers, lenders and property managers.

What the report does not mean

The Bank's observations should not be interpreted as a prediction that every property market will decline at the same rate.

Regional conditions differ, and market performance can change as interest rates, employment, investment and consumer confidence evolve.

However, the report does indicate that the sector is not yet operating in a consistently strong environment.

The industry outlook

The immediate challenge for the property industry is to navigate a period in which financing remains expensive, buyers are cautious and development costs are elevated.

A sustained recovery will likely require improvement in both demand and the conditions that allow new supply to be delivered.

Source: Bank of England, Agents' Summary of Business Conditions — September 2026.