Home sales up in February for second month in a row but still down on a year ago

An estimated 82,940 home sales took place in February, which was a 6% fall compared with the same month in 2023

UK home sales rose in February for the second month running, official figures show.

The number of purchases increased by 1% compared with January, and was 6% lower than in February 2023. The rise in sales comes at a time when inflation is falling, raising hopes of a spring bounce in the housing market.

Despite the increase, sales are still down on last year, with around 200,000 fewer homes sold in the past 11 months compared to the same period in 2022/23. Property experts said the market traditionally picks up in spring and summer, so they expect to see further growth in the coming months.

Matt Thompson, head of sales at London-based estate agent Chestertons, said: “London’s property market remained busy throughout February.” Nick Leeming, chairman of estate agent Jackson-Stops, said: “Whilst today’s figures show signs of stability, recent falls in inflation and the expectation that the Bank of England will cut the base rate in May is paving the way for a spring bounce.”

Yasin Patel, co-founder of property investors Autarky Sukuk, said: “Another month-on-month uptick in property sales suggests that the worst may be behind us.” Stuart Cheetham, CEO of mortgage lender MPowered Mortgages, said: “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.”

Yorkshire Building Society launched a £5,000 deposit mortgage for first-time buyers, potentially enabling them to borrow up to 99% of the property value this week.

Kevin Roberts, managing director, Legal and General Mortgage Services said: “While challenges do remain, it is encouraging to see far more competition on pricing and product innovation than tighter economic conditions allowed last year.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Buyers are able to budget with more confidence and tend to be more willing to transact if they believe that interest rates have peaked and the cost of borrowing is going to come down.

He added: “Lenders are demonstrating some welcome innovation in an effort to boost transactions, which are so important for the overall health of the housing market. Yorkshire Building Society’s 99% mortgage is just one example of how lenders are looking for solutions to help first-time buyers, while still lending responsibly.”

Nicky Stevenson, managing director at agent group Fine & Country, said: “Mortgage affordability is still holding back property transactions compared to last year, but there is reason for cautious optimism about activity levels rebounding soon, as the biggest lenders continue to slash their rates.

“Demand has already picked up nicely this spring, with buyers who have been delaying a move resuming their searches as consumer confidence builds.”

Frances McDonald, director of research at Savills, said: “This data lags more recent housing market indicators.” She said the property firm’s March buyer and seller survey “showed a further pick up in prospective buyers’ commitment to move, particularly amongst those reliant on debt.

“It also showed early signs that buyers’ budgets are beginning to rise, especially those looking to upsize and take on more mortgage finance.”