UK property transactions picked up in February but activity remains below last year’s levels following the distortion caused by changes to stamp duty thresholds.
The latest figures from HM Revenue & Customs show an estimated 102,410 residential transactions on a seasonally adjusted basis in February 2026, up 6% on January but 6% lower than the same month a year earlier.
On a non-seasonally adjusted basis, residential transactions totalled 86,430, also 6% down year-on-year but 7% higher month-on-month.
The February uptick marks the strongest monthly performance since March 2025, suggesting a modest recovery in market activity after a weaker start to the year.
STAMP DUTY SURGE
However, comparisons with early 2025 remain skewed by the surge in transactions ahead of changes to Stamp Duty Land Tax thresholds introduced in April last year, which pulled forward demand and inflated volumes.
Commercial property transactions followed a similar pattern, with seasonally adjusted non-residential deals reaching 10,150 in February. This was 2% higher than January but still 2% below February 2025 levels.
Non-seasonally adjusted non-residential transactions came in at 8,790, representing a 3% monthly rise and a 2% annual decline.
INDUSTRY REACTION
Tomer Aboody, director of specialist lender MT Finance, said: “A small increase in transactions can be attributed to a couple of factors with buyers taking advantage of lower mortgage rates, as well as a delay in completions following the Christmas break.
“Historically, we can see a spike during certain periods when stamp duty was reduced or before it was increased, which is always a good indicator as to how the market reacts with some help when it comes to taxes.
“With the ongoing conflict and unstable economy, hope of lower rates and lower stamp duty are dwindling, but hopefully more stability as we progress through the year will help push rates back down.”
MARKET WAS BACK ON TRACK
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “These strong numbers show just how market activity was gaining momentum in the period leading up to conflict in the Middle East.
“Completed sales are generally a better indicator of housing market health than more volatile prices, not least because these include cash and mortgage transactions. There was no question how the volume of enquiries to our offices dropped when the war started.
“However, the more committed buyers and sellers, particularly those relying on lower loan-to-value ratios, are continuing, albeit more cautiously in expectation any negative impact on mortgage costs and inflation will be relatively manageable.”
PERIOD OF VOLATILITY
Richard Pike, chief sales and marketing officer at Phoebus Software, said: “At the start of the year, I said 2026 would be the year the mortgage market starts growing again – and February’s figures show exactly the kind of momentum we were expecting. Transaction levels were 7% up on January and the highest since March 2025, clear evidence that the market was accelerating before the Iran conflict reshaped the global outlook.
“We are now operating in a very different environment – one defined by rising rates, tightening affordability and a shift in buyer and seller behaviour that will play out over the coming months.
“The mortgage market is entering a period where volatility is likely to remain the norm rather than the exception. To stay ahead, lenders will need technology that can adapt at pace – systems capable of real‑time insight, rapid product changes, and seamless operational flexibility. The priority now is building resilience and ensuring organisations are equipped to respond confidently to whatever the market delivers next.”
LOSING MOMENTNUM
Ian Futcher, financial planner at Quilter, said: “February’s transactions data points to a housing market that is losing momentum. The seasonally adjusted number of property transactions was 102,410, down 6% compared to the same time last year, though up by 6% on January due to the usual workings of the UK property market.
“The weaker picture compared with last February reflects a change in sentiment as much as affordability. Last year’s figures were flattered by stamp duty‑related behaviour, whereas buyers today are contending with a far more uncertain backdrop.
“As this was the highest number recorded since March last year, there were signs that the housing market was beginning to wake from its slumber. But rising geopolitical tensions, expectations of higher interest rates for longer, and a recent repricing of mortgage deals will likely have put it back into its sleep.
“While some of that impact is yet to be felt, the fall compared to last year suggests there is enough to indicate that buyers are taking longer to commit, with some choosing to wait for clearer signals on rates.
“Going forward, the uncertainty around mortgage rates and the geopolitical picture will weigh more heavily on transactions.”
“It is likely that going forward, the uncertainty around mortgage rates and the geopolitical picture will weigh more heavily on transactions as people sit tight and wait for things to calm down before committing to a property purchase or sale.
“From a policy perspective, this underlines how sensitive activity remains to borrowing conditions. Prices have been relatively stable, but transaction volumes are telling us that confidence is still fragile and closely tied to the cost and availability of mortgage deals. Those deals remain volatile too, with uncertainty about the Bank of England’s likely next steps with interest rates and whether or not it may actually have to raise rates this year.”
TIME TO FIX
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “At the point in time where this data was recorded, lower mortgage rates was helping support activity in the housing market. We saw a strong level of enquiries as buyers got on with moves that they had put on hold due to uncertainty over the Budget.
“Now, with the chance of further interest rate cuts on hold, and talk of rises if the war in the Middle East continues for a prolonged period of time, there is much volatility in mortgage pricing. Borrowers who will need a mortgage in the next six months should consider fixing now for peace of mind and in case rates rise further in the short term at least.”
FIRST-TIME BUYER HURDLE
Hamza Behzad, business development director at Finova, said: “Time and time again, the UK housing market has proven its resilience to systemic shocks. As transactions pick up, it’s clear that first-time buyer appetite is still on the rise. The ongoing conflict in the Middle East has introduced some volatility to the market, but today’s figures paint a clear picture: underlying demand is strong.
“But there are still some hurdles for first-time buyers. While housing in England is now at its most affordable level in over a decade, swap rates are increasingly volatile. This will translate to steeper rates – a forecast slash of the base rate has already been postponed, and many buyers are now facing mortgage deals at above 5%.
“There is hope this proves to be a temporary period of disruption as markets settle, but much will depend on how long current volatility persists. The industry is stepping up, urging the government to roll out a more coordinated housing strategy to protect the UK housing market from external disruption. For now, we can rest assured that the UK housing market has endured disruption before and can do so again.”
GEOPOLITICAL SHIFT
Ryan McGrath, director of second charge mortgages at Pepper Money, said: “February’s figures are a welcome sign that the underlying demand we saw building through the final months of 2025 hasn’t evaporated. Transactions had been tracking steadily upward from September through to December before pulling back in January, suggesting that softness was seasonal, rather than structural.”
“Year-on-year, volumes sit below last February, though much of that early 2025 activity reflected buyers pushing to complete ahead of April’s stamp duty threshold changes, making it a high watermark that was always going to be hard to match.”
“The improving rather than moving dynamic remains the dominant force in this market. Many homeowners are sitting on competitive fixed rates they have no interest in unwinding, and for those borrowers, a second charge mortgage offers a practical way to access equity or manage debt without touching their existing deal.
“With oil prices rising and the geopolitical backdrop shifting sharply at the end of the month, February may prove to be the last settled data point before a more uncertain period. The case for flexible lending that doesn’t require a full remortgage is only likely to grow from here.”
