Property transactions fell 6% year-on-year in February, with HMRC data suggesting landlords face an increasingly narrow window for portfolio expansion as stamp duty costs bite and financing conditions tighten.
The 102,410 completed transactions mark a sharp contrast to February 2025, when buyers rushed to beat April’s stamp duty changes. For landlords weighing acquisition decisions, the figures highlight how market conditions have shifted against expansion strategies.
Stamp duty burden weighing on investor activity
This follows Residential Landlord’s report on stamp duty receipts hitting £995m in February, with investors absorbing significantly higher transaction costs since April 2025. The 5% surcharge on additional properties now costs landlords £12,500 on a £250,000 purchase – before accounting for the standard rates.
Nick Leeming, chairman of Jackson-Stops, said last year’s rush had distorted comparisons. “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 become more cautious. “Activity levels suggest a measured start to the year, with buyers proceeding thoughtfully as mortgage rates continue to fluctuate.”
BTL rates add to acquisition headwinds
Landlords considering purchases face a double squeeze. Beyond stamp duty, BTL mortgage rates have climbed sharply following the Middle East conflict, with swap markets now pricing in rate rises rather than the cuts anticipated earlier this year.
Nathan Emerson, chief executive of Propertymark, warned conditions could deteriorate further. “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.”
Full transaction data is available from HMRC’s monthly release.
Monthly uptick offers limited comfort
The 6% monthly increase from January provides some reassurance that the market has not seized up entirely. February’s total was the highest since March 2025, suggesting underlying demand persists despite the headwinds.
Andrew Lloyd, managing director at Search Acumen, cautioned against optimism. “Today’s decrease in property transaction volumes sets an ominous tone for the market, as dark clouds gather on the horizon.”
Lloyd pointed to US conditions as a warning. “The US shows increasing affordability pressures as mortgage rates there surge to 6.38%, causing overall house sale volumes to fall. The reality is that overall, things are likely to get worse before they get better.”
Opinion
The acquisition window for landlords is narrowing from both ends. Stamp duty adds thousands to every purchase, while BTL rates have lurched upward just as many expected relief. Landlords still determined to expand should stress-test deals against rates staying elevated through 2026 – and factor in the possibility that transaction volumes fall further, making exit strategies harder to execute. For most, this is a market for consolidation rather than growth.
