Property transactions fell 6 percent year-on-year in February as the housing market absorbs higher stamp duty costs and ongoing uncertainty from the Middle East conflict.
HMRC data released today shows 102,410 seasonally adjusted residential transactions completed in February 2026, down from 109,400 in February 2025 but up 6 percent from January’s figure – the highest monthly total since March 2025.
Market holds firm despite headwinds
Nathan Emerson, chief executive of Propertymark, said the monthly increase was a positive signal. “An increase in property transactions month-on-month for February is a positive signal for the housing market, suggesting a degree of resilience among buyers and sellers despite a challenging economic backdrop,” he said.
Emerson warned that geopolitical pressures could still affect activity. “With inflationary pressures building, partly linked to ongoing conflict in the Middle East, and the likelihood of this feeding through into borrowing costs and household finances, there is a risk that market conditions could become less stable in the months ahead.”
The data follows Landlord Knowledge’s recent report on buyer enquiries dropping 13 percent as the Iran conflict pushed up mortgage rates, suggesting the full effects of market uncertainty may not yet be reflected in completed transactions.
Year-on-year decline reflects stamp duty surge
Nick Leeming, chairman of Jackson-Stops, said the annual decline was partly driven by last year’s stamp duty rush. “February’s HMRC property transactions data points to a housing market that remains resilient,” he said. “This marks a clear contrast to the same period last year, when buyers were actively rushing to complete transactions ahead of the stamp duty changes introduced in April 2025.”
Leeming noted that buyer behaviour had shifted towards a more deliberate approach. “Activity levels suggest a measured start to the year, with buyers proceeding thoughtfully as mortgage rates continue to fluctuate.”
With BTL rates hitting their highest level in two years, landlords face a more challenging environment for both acquisitions and refinancing.
Second charge market sees opportunity
Ryan McGrath, director of second charge mortgages at Pepper Money, said February’s figures confirmed underlying demand had not 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,” he said.
McGrath highlighted the growing role of second charge lending. “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 without touching their existing deal.”
Analysts warn of further contraction
Andrew Lloyd, managing director at Search Acumen, struck a more cautious tone, warning that worse may be ahead. “Today’s decrease in property transaction volumes sets an ominous tone for the market, as dark clouds gather on the horizon,” he said.
Lloyd pointed to US market conditions as a potential indicator. “The US, as a market indicator of what we might expect to see in the coming weeks, shows increasing affordability pressures as mortgage rates there surge to 6.38 percent, causing overall house sale volumes to fall.”
He warned that transaction volumes could decline further. “The reality is that overall, things are likely to get worse before they get better, with the coming months set to bring a contraction of the market compared to previous years.”
Full data is available from HMRC’s monthly property transactions release.
What this means for landlords
- If you’re selling: The year-on-year decline suggests buyers remain price-sensitive – realistic pricing will be essential for timely sales
- If you’re refinancing: Second charge products may offer a way to access equity without losing competitive existing rates
- Watch for: Further rate volatility as geopolitical tensions feed through to swap rates and lending costs
- Bottom line: Transaction volumes remain subdued but stable – a holding pattern rather than a collapse
Editor’s view
The 6 percent annual drop looks alarming until you remember what February 2025 looked like – a market in overdrive as buyers raced to beat the stamp duty deadline. Compared to that artificial peak, today’s figures suggest a market finding its natural level. The real test comes in the months ahead as higher borrowing costs work their way through the system.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 31 March 2026
Sources: HMRC, Propertymark, Jackson-Stops, Pepper Money, Search Acumen
Related reading: Buyer enquiries drop 13% as Middle East tensions push up mortgage rates
