The estimated number of residential transactions in the UK fell by 6% year-on-year in February to 82,940, HM Revenue and Customs (HMRC) has revealed.

In its property transactions commentary, HMRC also estimated that this figure increased by 1% from January.

The statistics provide monthly provisional estimates of residential and non-residential property transactions in the UK and its constituent countries.

These figures are based upon records by HMRC, Revenue Scotland and the Welsh Revenue Authority for stamp duty land tax, land and buildings transaction tax and land transaction tax.

Chief executive officer at MPowered Mortgages, Stuart Cheetham, said: "The momentum is modest but unmistakable. After sliding throughout 2023, seasonally adjusted house sales climbed month-on-month in both January and February as the property market began the new year in recovery mode.

"There could be more good news to come too, with estate agents reporting an uptick in both the number of buyers and the number of homes coming onto the market. With the market becoming steadily more free-flowing, the tally of completed sales should pick up further in coming months.

"While the Bank of England chose not to reduce its base rate last week, it’s now a question of when, not if, the cost of borrowing comes down. The current consensus is that if inflation returns to the Bank’s 2% target quickly, it could make two or even three cuts to the base rate during the remainder of 2024."

For non-residential properties, transactions increased by 4% year-on-year in February, while also increasing by 6% month-on-month.

Managing director at Legal & General Mortgage Services, Kevin Roberts, added: "While challenges do remain, it is encouraging to see far more competition on pricing and product innovation than tighter economic conditions allowed last year. As we move further from the pandemic-induced spike in house prices, housing affordability continues to adjust as a result – while the ratio between median house prices and salaries was 9.1 in 2021, it has since dropped to 8.3.
 
"However, there is no denying that many still face challenges around raising deposits. The first-time buyer market remains propped up by the bank of family as a result, and currently supports just under half (47%) of all homes purchased by buyers under the age of 55. This typically comes in the form of gifted or loaned deposits, or allowing adult children to live at home rent-free while they save for a deposit."

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