Seasonally adjusted figures from HMRC showed this was the second month in a row that residential property transactions had risen.
On a seasonally adjusted basis, transaction levels were 6% down on the same month last year.
On a non-seasonally adjusted basis, there were 73,360 residential property transactions in February. This was 3% lower than last year and 9% up on January.
Improved conditions but still difficult for buyers
Although the rise in transactions was small, industry figures considered this to be a sign of a rebound in activity.
However, many noted that people still struggled to get onto the property ladder.
Iain McKenzie, CEO of The Guild of Property Professionals, said: “This month-on-month rise in home sales is another piece of good news that points to the green shoots of recovery blossoming through the year.
“Increased mortgage approvals and an expectation of lower interest rates to come all add to the sense that there’s a spring in the step of the property market.”
He added: “However, affordability still remains an obstacle for millions, and we need to see more being done to address this for those eyeing up buying their own home.
“The Yorkshire Building Society announced a new product yesterday aimed at getting more first-time buyers on the property ladder, which is good news.
“The cost-of-living crisis has forced more people to shelve their saving habits, so any measures to help people with small deposits to buy should be welcomed.”
Stuart Cheetham, CEO of MPowered Mortgages, 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.
“Two factors are driving the recovery – a widespread sense among buyers that last year’s drop in property prices is over and the improving affordability of mortgages.”
Katie Pender, managing director of Target, said the month-on-month figures were “certainly hopeful, and the market looks healthier than it did at the beginning of the year”.
She added: “There are still many people who are struggling to get on the housing ladder or who are bogged down in the homebuying process. With a potential change in government, there is uncertainty too.
“What we can do is to continue to support lenders and borrowers with the latest technology, which is essential to speeding up decision-making and improving customer satisfaction.”
Stimulating investors
Terry Woodley, managing director of development finance at Shawbrook, said the increase in property transactions would be “welcome news for developers”.
Woodley said this reflected increased confidence and, along with falling inflation and expected declining interest rates, this created “further optimism for developers looking to take on more projects”.
He added: “Many will also be keeping an eye on the outcome of the government’s brownfield consultation, which could help to streamline planning processes
“This will also help the rental market, which continues to be starved of stock in the face of soaring demand. Many developers have had to alter their strategies to deal with market uncertainty and rising costs, but the prospect of reduced planning barriers and lower mortgage rates may encourage developers to shift more in favour of residential developments.”
Yasin Patel, co-founder of ethical property investors Autarky Sukuk, said that although there were positive signs, “the industry cannot rest on its laurels”.
He added: “It must remain dynamic and open to the possibility that the economy could stagnate further.
“Continued investment in infrastructure, coupled with proactive policy measures aimed at enhancing affordability and stimulating demand, could stimulate further growth in the sector.
“There is still a shortage of good-quality housing in many parts of the country, and we need to see a renewed commitment to increasing house building rates.
“We also need landlords to be encouraged to renovate existing properties that have slipped into decay. These two measures working in tandem would allow even more people to finally get their foot on the property ladder.”
In January, HMRC reported that residential property transactions had seen a fourth monthly drop in December.
