The number of UK residential property transactions saw a significant increase in February 2025, according to the latest provisional figures from HM Revenue & Customs (HMRC), with many buyers rushing to complete purchases ahead of the stamp duty deadline.

The seasonally adjusted estimate for residential transactions reached 108,250, marking a 28% rise compared to February 2024 and a 13% increase from January 2025. The non-seasonally adjusted figure stood at 90,430, up 24% year-on-year and 10% month-on-month.

The commercial property market also showed positive momentum. The seasonally adjusted estimate for non-residential transactions was 10,090, reflecting a 1% annual increase and an 8% rise from January 2025.

However, the non-seasonally adjusted figure of 8,800 was 2% lower than February 2024 but still 4% higher than January 2025.

STAMP DUTY IMPACT

The sharp rise in residential transactions comes as buyers and investors anticipate upcoming changes to stamp duty, with many looking to finalise purchases before new rules take effect from next week.

From Tuesday the nil-rate threshold for standard residential purchases will decrease from £250,000 to £125,000.

For first-time buyers, the nil-rate threshold will drop from £425,000 to £300,000, and the maximum purchase price eligible for first-time buyers’ relief will decrease from £625,000 to £500,000.

PIPELINE ACCELERATED

Richard Donnell, Executive Director at Zoopla, said: “The pipeline of housing sales has recovered over 2024 as sales volumes have grown.

“The size of the sales pipeline has accelerated since the Autumn Budget as many buyers hoped to beat next weeks stamp duty deadline, with a sizable jump in sales agreed in February 2025. Our data shows this will grow higher again next month in March.

“Housing market activity continues to increase despite the ending of stamp duty relief.

“Zoopla’s latest data shows sales agreed up five per cent year on year, with many more homes for sale. There is a stamp duty hangover effect in London where first-time buyers face the highest increase in costs of buying. We expect sales to grow 5% over 2025 to 1.15m.”

MARKET REMAINS QUIET

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Transaction numbers have picked up on the back of rate reductions and buyers trying to take advantage of stamp duty savings before they disappear at the end of this month.

“The market remains quite tough but business continues to pick up as the sun comes out and the weather starts to improve.

“Rate reductions are a great way of boosting confidence and activity in the housing market, as we saw with the base rate cuts in the second half of last year and the reduction earlier this year. Further reductions from the Bank of England will help improve confidence and affordability, particularly once the stamp duty concession has ended.”

TEMPORARY SLOWDOWN

Simon Webb, managing director of capital markets and finance at LiveMore, said:  “A peak in February was anticipated as buyers moved quickly to complete purchases ahead of the stamp duty deadline, and while we may see a temporary slowdown in April after the deadline, demand remains strong and transaction volumes are significantly up on this time last year.”

BANK CUT WOULD HELP

Tomer Aboody, director of specialist lender MT Finance, said: “Higher transaction volumes are likely to be down to buyers bringing moves forward in order to take advantage of the stamp duty discount.

“Overall, it has been a positive few months for the housing market with transaction levels improving, although still below pre-pandemic levels. This comparatively subdued activity illustrates how big an impact higher interest rates have had on the market.

“As buyers look to the Bank of England for further rate reductions, any assistance here will help the upwards trajectory in transaction numbers as the year progresses.”

COMING MONTHS WILL BE KEY

Richard Pike, chief sales and marketing officer at Phoebus Software said: “A peak in residential transactions in February was expected as buyers rushed to complete purchases ahead of the stamp duty deadline, mirroring trends seen before previous tax changes. While this has contributed to the uplift in today’s figures and is likely to be repeated in March data, we may see a slowdown in April as the market adjusts.

“Despite this, transaction levels remain significantly higher than this time last year, suggesting underlying demand is still strong. With interest rate cuts this year providing some support but broader economic pressures weighing on affordability, the coming months will be key in assessing whether market momentum can be sustained.”

FUTURE ACTIVITY

And Melanie Spencer, sales and growth lead at Target Group, said: “It’s important to note that with transaction times as they are, these buyers would have said yes perhaps a couple of months prior to January – meaning they may not yet reflect the rush to beat the stamp duty threshold change.

“We’ve heard from the likes of Propertymark, who have reported an uplift in the sales market among its members in January, which was driven mainly by the stamp duty rise.

“As we reach this threshold change next week and the cost to buy increases, it will be interesting to see what impact this has on future activity – especially as inflation looks set increase over the coming months.”

HOUSING SUPPLY

Nathan Emerson, chief executive of Propertymark, said: “It is positive news that many consumers have adapted to current market conditions concerning typically higher interest rates and the impact this can have on a potential house move.

“House price growth has recently been reflected in this month’s UK House Price Index which was published this week and found the average house price increased by 4.9% year on year, which will provide comfort to existing homeowners.

“However, various governments across the UK must pay close attention to meeting their individual housing targets to help stabilise overall supply.

“Across the forthcoming years it will remain vital demand is met, as we see an ever-expanding population, which is expected to hit around 70m people by the end of the decade which in the longer term as supply increases this will keep a balancing effect on prices increases.”