House price growth holds steady in February
House prices held steady in the year to February and rose slightly from last month, according to Nationwide’s house price index.
The average UK house price last month was £273,176, up 0.3 per cent from January, and annual price growth was unchanged at one per cent.
A continued improvement in affordability helped drive first-time buyers to engage in the housing market, which continues to recover from months of pre-Budget speculation at the end of last year.
Total market transactions in 2025 were up ten per cent from 2024, with mortgage completions up 18 per cent year on year.
Last year’s boost in housing activity was driven by easier credit availability, Nationwide said in a previous report, with first-time buyer activity up 20 per cent from 2024.
The number of Brits snapping up buy-to-let homes is gradually increasing, but remains subdued compared to historic levels.
This part of the market is particularly vulnerable to economic and political headwinds, the bank said, because the higher interest rate environment has more of an effect on landlord demand.
Nationwide analysts also noted that the government’s recent renters’ rights reforms, which abolished “no fault” evictions among other changes, are impacting “landlord sentiment”.
Housing market on road to recovery
Robert Gardner, Nationwide’s chief economist, said: “This reinforces the view of a modest recovery after a dip at the end of 2025, most likely reflecting uncertainty around potential property tax changes ahead of the Budget.
“Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected.”
The house market is slowly approaching a full recovery from the pandemic, Gardner said, with mortgage approval rates now close to the prevailing levels before the Covid-19 lockdowns.
Last week, Zoopla’s house index revealed that a third of London houses are cheaper to buy on a 30-year mortgage than to rent.
House prices in the capital shrunk year on year, according to the property search portal.
Richard Donnell, Zoopla’s executive director, said: “Lower mortgage rates and improved affordability of mortgages means now could very well be the best time to buy a home in recent years, especially for first time buyers with more homes available to buy for less than the cost of renting.”
Jonathan Hopper, CEO of Garrington Property Finders, said Brits see now as an attractive time to buy, with prices having flatlined in many areas across the South of England.
He said: “The market has made a strong start to 2026, and would welcome some stability and clarity from the government to help consolidate its gains.”
But Hopper warned the ongoing conflict in Iran and the resulting spike in oil prices could dash hopes for further interest rate cuts, which would have offered more confidence to the housing market.