The effects of the conflict in Iran are now feeding through to the UK housing market with sales agreed volumes down 8.1% in May 2026 compared with May 2025, figures from TwentyCi have revealed.
The data firm has now downwardly revised its sales forecast for the year from 1.2 million transactions to 1.13 million. This represents a 6.8% fall compared with 2025 but remains 2.6% higher than 2024.
The conflict has added a fresh layer of uncertainty to the UK housing market by driving up energy prices, increasing inflation expectations and pushing mortgage rates higher. In May, SSTC volumes fell to 109,922 compared with 119,607 seen the previous year – a drop of 8.1%.
Throughout the year, declines have been recorded across all price bands but are partly attributable to the changes in stamp duty last April. Regionally, demand has fallen across all UK markets with the exception of Scotland, which was unaffected by the tax changes. Inner London has experienced the sharpest contraction in demand of -11.2%, followed by the North West at -6.7%.
Nick Huntley, Director of TwentyCi said: “This weakening of demand, seen particularly during May, points to a likely slowdown in transactions later in the year. As a result, we’ve revised our forecast to reflect a more challenging market backdrop.
“However, across the bigger picture, the market remains very resilient. Demand is still nearly 15% higher than in 2023 and remains ahead of 2024 levels despite the ongoing affordability pressures, geopolitical uncertainty and higher mortgage costs. That resilience reflects the determination of committed buyers, who continue to move even as the market conditions become less certain.”
Meanwhile, there are positive signs seen across the market. Supply is currently the highest TwentyCi has ever recorded with 794,210 new instructions tracked at the end of May for the year to date. This is 2.7% higher than last year. March 2026 was a particularly strong month with more than 175,000 new properties coming to market.
Housing supply has expanded across every price band, led by properties priced below £200,000, where listings increased by 3.9% year-on-year. Supply in the £200,000 - £350,000 segment also grew strongly, rising by 3.0%.
Regionally, available stock has increased across almost all parts of the UK, with only Wales and Northern Ireland recording declines. The South East saw the strongest increase, up 5.3% year-on-year, continuing the trend of stronger inventory growth across southern England than in the Midlands and northern regions.
Fallen throughs are also down by 11.1% YoY to 115,025. The percentage of properties having at least one fallen through has also reduced YoY by -1.0 percentage points and compared with last year, the fallen through rates have decreased in all price bands without exception.
Huntley added: “The positive story in the market right now is supply levels. We're seeing the highest level of new instructions on record which is good news for buyers, who have more choice than at any point in recent years.
“What's equally encouraging is that fewer transactions are failing with the decline in fall-through rates across all price bands suggesting a more determined market.
“We cannot overlook an 8% fall in SSTCs, however, for the year to date, transaction prices have so far remained broadly unchanged.”
