The number of residential property transactions across the UK increased by 2% in February compared to January’s total, new figures published by HMRC have indicated.

February’s non-seasonally adjusted estimate, which reached 76,920, was however 18% down compared to the same month last year.

HMRC’s monthly estimates are based on its own records as well as those of Revenue Scotland and the Welsh Revenue Authority, for Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) in each of the three nations respectively.

UK residential transactions have generally been stable in recent months, HMRC has stated, although a decline is now starting to show in the numbers. Residential transactions are currently marginally lower than pre-pandemic levels, with the estimate for February 2023 of 76,920 comparing to 82,830 in February 2020.

CEO of fintech broker Loan.co.uk, Paul McGerrigan, commented: “The fact there has been a relatively modest monthly increase in the non-seasonally-adjusted figures from January to February, and therefore a 4% dip in the seasonally adjusted figures, is surprising against a backdrop of sharply rising interest rates and amid a cost of living crisis.

“However, analysis of the latest house price index figures from both the Land Registry, and Halifax, show that prices are holding their own – indicating there is still firm demand, despite the economic backdrop and tightening pressure of interest rates.

“The mild drop-off may indicate either first-time-buyers are being squeezed out of the market, or savvy buyers are adopting a ‘watch-and-wait’ approach to see whether the market dips – or a combination of the two.”

Chairman of Air Club, Stuart Wilson, added that the latest figures are a “positive indication” that the market is finding its strength again, and suggested there is room for “further optimism” heading towards spring.

“The trends we’re starting to see in the later life market, as well as the wider mortgage market, are a far cry from this time six months ago,” Wilson said.

“Though things are moving in the right direction, some barriers do remain. Affordability is still a key issue for prospective homeowners and first-time buyers are increasingly needing support from their families to get that first foot up.

“Our industry must be ready to provide the necessary advice and guidance to help this happen, in the ways best suited to each individual circumstance.”

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