The latest data from the Office for National Statistics (ONS) shows that annual UK house price growth rose modestly to 1.2% in the 12 months to February 2026, with the average property now valued at £268,000.
While the figures point to a stable market on the surface, industry experts warn that they capture a period before escalating geopolitical tensions and renewed inflationary pressures began to ripple through the economy. Mortgage and property professionals share their views on what lies ahead for the wider housing market.
Ian Futcher, financial planner at Quilter:
“The UK House Price Index for February gives a pre-shock snapshot of a housing market that was broadly stable before the sharp deterioration in mortgage affordability seen more recently, with pricing still being supported by relatively manageable borrowing costs at the time.
February predates the escalation of the conflict in Iran, which subsequently pushed up energy prices, inflation expectations and swap rates, forcing lenders to reprice mortgages rapidly through March and early April.
That said, there are tentative signs that the worst of the mortgage rate spike may have passed. In recent weeks, several major lenders have begun to trim fixed rates as wholesale funding costs have eased back, providing some marginal relief for borrowers. While rates remain well above February levels, pricing appears to have stabilised for now rather than continuing to rise.
Even so, changes in mortgage costs do not feed through to house prices immediately. The sharp rise in borrowing costs seen after February is more likely to weigh on activity and sentiment in the spring and early summer data, particularly among first‑time buyers and more rate‑sensitive parts of the market.
Looking ahead, the outlook for house prices will depend largely on how geopolitical risks evolve. If tensions ease further and energy‑driven inflation pressures recede, mortgage rates could continue to edge lower, supporting broadly flat prices rather than a sharp correction. If volatility returns, affordability constraints are likely to reassert themselves, leading to weaker transaction volumes and softer prices as the year progresses.
For households with mortgages due to mature later this year, recent weeks have underlined how quickly global events can feed through into borrowing costs. While pricing has improved at the margin, the market remains fragile. Securing a rate early can provide certainty in an unpredictable environment, while still allowing borrowers to benefit if conditions improve further.”
Chris Storey, Chief Commercial Officer, Atom bank:
“This data represents the calm before the storm, as it predates the conflict in the Middle East and the resulting turbulence. Future data from the ONS will reveal the true impact of the conflict on house prices, and whether it has acted as a brake on the growth seen this month. Thankfully, things are beginning to settle, with Moneyfacts last week reporting the first drop in mortgage rates since the start of the war in Iran, good news for aspiring buyers.
Those would-be buyers should steel themselves for a painfully slow journey, however. The latest data from Propertymark shows 43% of transactions taking 17 weeks to reach completion, the highest proportion since it started tracking the data in 2015. It’s extraordinary that the house-buying process still takes so long, creating stress for all involved. As an industry, we must continue to look for ways to streamline that process, providing greater peace of mind to brokers and their customers.”
Nathan Emerson, CEO of Propertymark, comments:
“While it is encouraging to see growth within the housing market, we sit in a phase where the forthcoming months are more difficult to foretell from an affordability viewpoint.
“With the wider picture regarding inflation being very complex to fully envisage, the Bank of England will likely choose to approach the situation with extreme caution, as they make their next base rate decision at the end of the month.
“Worst case scenario, some people may find additional pressures being placed on their household finances across the coming months from three distinct angles. Inflation may push up prices on key household purchases, such as the weekly shop. Base rates could also see increases, affecting those with tracker products, as well as those taking on new mortgage deals, and we could see potential fluctuation in energy prices as well.
We may see an increased need for a cautious and thoughtful approach to household budgeting, particularly if the effects of global unrest continue to have an influence on our economy domestically.”
John Phillips, CEO of Just Mortgages and Spicerhaart, said:
“As predicted, inflation has gone up in March, but perhaps not as high as many would have expected. There’s no doubt that this is still very much in our future, with the conflict still ongoing and both oil and commodity prices feeling the effect. Right now, the illusive 2% target feels like a pipedream with inflation set to travel further in the wrong direction. What this means to the bank rate is yet to be seen. Any plans for a rate-cutting party next week should be firmly on ice. If anything, we’ll just be grateful to avoid any hikes.
While we’re certainly feeling it at the petrol pumps, the conflict in Iran hasn’t seemed to slow down movers and buyers – neither has the Easter half-term disruption. We are still posting really positive numbers for buyer registrations, valuation requests and for mortgage appointments. While remortgages continue to drive activity, we are still seeing really encouraging purchase numbers. It comes down to controlling what we can control and for advisers, that means being present and visible, staying in close contact with customers and lenders, and delivering that five-star service for those looking to navigate the market.”
Richard Pike, sales and marketing director at Phoebus Software, on this morning’s inflation figures:
“Today’s inflation figures are significant – it’s the first CPI data to be published since the Iran conflict began, and more importantly the numbers will have a direct input into the Bank of England’s base rate thinking ahead of the MPC meeting next week.
The good news for the economy and householders is that the price pressures caused by rising oil and fuel prices have been partially offset by both the energy price cap, which was reduced on 1 April, and the cooling of underlying inflation, thanks mainly to easing wage pressures. The big question is whether this slight rise in inflation is a temporary energy bump or the start of a more stubborn inflationary phase.
In the short term, I expect mortgage rates will remain at current levels and be volatile. Looking further ahead, if rates do stay higher for longer this will accelerate demand for flexible mortgage servicing in areas such as payment strategies and product transfers where the right servicing software will automate as much as possible to support both users and borrowers.”
Martin Sims, Distribution Director at Molo Finance comments:
“Increasing inflation reinforces what households are already feeling, particularly at the petrol pump where rising fuel costs are feeding through quickly. After a long period of high inflation, it does not take much to dent consumer confidence again, and that caution is likely to weigh on spending and borrowing decisions.
Andrew Bailey has been clear that the Bank of England is in no rush to move. With energy prices still volatile and limited hard evidence on how this shock will settle, policymakers will want to avoid acting too quickly and risk adding further pressure to an already fragile outlook.
In this environment, stability matters. For brokers and their landlord clients, refinancing volumes remain high as investors look to secure the best available rates. That is where lenders with a close working relationship with treasury come into their own, helping to maintain product consistency and pricing discipline.
At the same time, we continue to see strong interest from UK, expat and foreign investors. UK buy to let remains an attractive, income-focused asset, and in uncertain global conditions that appeal tends to strengthen rather than fade.”
Ben Thompson, Director of Home Moving Strategy, Mortgage Advice Bureau:
“Inflation ticking up reinforces the likelihood that interest rates will stay higher for longer – but the impact on borrowers won’t be universal.
For those remortgaging, it’s a tale of two halves. Homeowners coming off ultra-low fixed rates will see a more noticeable jump in repayments, while those exiting more recent deals may find the change far less significant.
Affordability remains a key consideration for aspiring buyers. Our research shows that 52% say they’re ready to buy this year, while 41% are still waiting for a ‘sign’ to make their move – often due to concerns around house prices (45%), deposits (44%), or not fully understanding the process (31%).
The market, however, is evolving. Lending is becoming more flexible, with more options available, meaning many buyers may be closer to purchasing than they think.
For those planning a move later this year, today’s figure underlines the need to keep expectations realistic. A sharp drop in mortgage rates still looks unlikely in the near term, so planning around current affordability levels – and seeking expert advice from a broker – remains key to moving forward with confidence.”
Nick Leeming, Chairman of Jackson-Stops, comments in response to the Office for National Statistics House Price Index data published today:
“The latest data suggests a steady market, with values stabilising and modest annual growth being recorded.
Transaction activity continues, but conditions are more constrained than in previous periods. Buyer demand is present, although increasingly contingent on pricing and financing, with affordability remaining a key consideration in determining the pace of sales.
Performance continues to vary across regions, with markets characterised by stronger demand and constrained supply proving more resilient, while others are experiencing longer timeframes to agree sales and greater price sensitivity.
Looking ahead, the near-term outlook will be influenced by the direction of mortgage rates and wider financing conditions. Recent adjustments in mortgage pricing, alongside ongoing uncertainty around the policy outlook from the Bank of England, are likely to weigh on momentum, even where underlying demand remains intact.
At the same time, heightened geopolitical uncertainty is making the outlook more difficult to predict over the coming months. However, the market has so far shown continued resilience, with activity continuing even as borrowing costs have edged higher in recent weeks.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says:
“The property market continues to demonstrate resilience despite a backdrop of global uncertainty.
The Middle East conflict has contributed to increased caution across financial markets. Higher mortgage rates have naturally become a talking point among applicants.
We are seeing a slight softening in viewing numbers as some buyers pause to assess the situation; however, the underlying market remains robust. Serious buyers are still very much active, with second viewings continuing and sales being agreed at levels typical for this time of year. While there is greater awareness of cost, for the right property, committed buyers are continuing to move forward with confidence.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “Inflation rising to 3.3 per cent is not surprising given the hike in fuel prices on the back of the Middle East conflict, and it is expected to edge higher still in coming months.
Affordability concerns are once again an issue for borrowers, as mortgage rates headed upwards on the back of expectations that interest rates would stay higher for longer. However, in recent days, there has been some relief as a number of lenders have reduced their fixed-rate mortgages, including Santander, HSBC and Skipton – a trend we hope to see continue in the coming days.”
Alex Upton, Managing Director, Specialist Mortgages & Bridging Finance, Hampshire Trust Bank, said:
“Rental growth has slowed from the peaks seen over the past two years, but the underlying pressure has not gone away. Demand continues to outstrip supply in many parts of the market, particularly for well-located and better-quality stock, and that imbalance is likely to persist while delivery of new housing remains below what is needed.
What has changed is landlord confidence. Expansion is no longer the default response to rising demand. Investors are becoming more selective and more deliberate in how they deploy capital. The focus has shifted towards resilience, refining portfolios, strengthening income and moving towards assets that can perform more consistently under tighter regulatory and cost conditions.
That shift is reshaping funding requirements. Landlords are not simply adding new properties; they are restructuring. This includes releasing capital selectively, consolidating borrowing and repositioning portfolios to reflect changing margins and longer-term strategy, often through more complex, transitional transactions. It requires lenders who can assess cases on their merits and structure funding around how portfolios operate in practice.
In this environment, clarity and consistency matter. Where funding remains accessible and decisions are grounded in a clear understanding of the underlying strategy, confidence holds. Where it does not, it falls away quickly. Over time, that feeds directly into supply and availability. Without that stability, the rental market does not rebalance, it tightens.”
Tomer Aboody, director of specialist lender MT Finance, says:
“A minimal increase in average property values over the past 12 months underlines the tough market conditions we are now facing.
Lack of encouragement of any form from the government has fuelled further hesitation in both buyers and sellers with many pausing and taking a ‘wait and see’ approach. With further reductions in base rate on hold at least for now, and more stamp duty paid due to the lack of any concessions, there is little incentive to make a move.”
Alex Upton, Managing Director, Specialist Mortgages & Bridging Finance, Hampshire Trust Bank, said:
“Rental growth has slowed from the peaks seen over the past two years, but the underlying pressure has not gone away. Demand continues to outstrip supply in many parts of the market, particularly for well-located and better-quality stock, and that imbalance is likely to persist while delivery of new housing remains below what is needed.
What has changed is landlord confidence. Expansion is no longer the default response to rising demand. Investors are becoming more selective and more deliberate in how they deploy capital. The focus has shifted towards resilience, refining portfolios, strengthening income and moving towards assets that can perform more consistently under tighter regulatory and cost conditions.
That shift is reshaping funding requirements. Landlords are not simply adding new properties; they are restructuring. This includes releasing capital selectively, consolidating borrowing and repositioning portfolios to reflect changing margins and longer-term strategy, often through more complex, transitional transactions. It requires lenders who can assess cases on their merits and structure funding around how portfolios operate in practice.
In this environment, clarity and consistency matter. Where funding remains accessible and decisions are grounded in a clear understanding of the underlying strategy, confidence holds. Where it does not, it falls away quickly. Over time, that feeds directly into supply and availability. Without that stability, the rental market does not rebalance, it tightens.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says:
“Though offering the most comprehensive house-price snapshot, including approximately 40 per cent of cash as well as mortgaged transactions, these figures are a little dated. The broadly unchanged picture tells a story of still-high supply and growing demand in the period leading up to the start of the Middle East war, supported by mortgage offers arranged a few months earlier and better-than-expected employment figures.
However, the switch from want-to-move to need-to-move coincided with upward pressure on interest rates and inflation so looking forward, prices are likely to continue to stay in check and even soften a little but no significant change is expected for now.”
James Evans, CEO at Douglas & Gordon, comments in response to the ONS Private Rents and House Price data published today:
“The latest ONS House Price Index data shows a small rise in values, which tallies with what we’ve been seeing across London. The market is broadly steady, with modest growth focused on pockets where supply is tight and correctly priced homes still attract competition.
Yet, with these figures reflecting house prices until February, they largely predate the escalation of the Middle East conflict and the recent changes in mortgage pricing. As such, this trend may prove harder to build on in the months ahead, particularly if higher borrowing costs persist.
Even so, this uplift is a sign that demand hasn’t vanished. With hopes of relief via rate cuts or stamp duty changes fading, more movers are accepting that waiting for perfect conditions also means putting life on hold. For many, decisions are being driven by jobs and family needs, and buyers with competitive mortgage offers will be keen to proceed while those deals still work.
The encouraging point is that this is starting to look like a market that rewards good preparation and sensible pricing. Even amid wider uncertainty, there are still buyers ready to act when the right home comes along.”
Colin Bradshaw, CEO at TwentyCi says:
“Today’s rise in inflation, driven largely by energy and transport costs linked to ongoing geopolitical tensions, reinforces the likelihood that interest rates will remain higher for longer, sustaining pressure on mortgage affordability and lender pricing strategies. We’re already seeing the impact of swap rate volatility feeding through into the market, with widespread product withdrawals and fixed rates moving back above 5% for many borrowers.
While inflationary pressures are clearly weighing on household finances and dampening new buyer enquiries, TwentyCi data suggests the property market remains relatively resilient overall. Activity is beginning to cool, particularly in London and the South East, but transaction levels are still expected to outperform 2024, with committed buyers continuing to progress despite a more challenging lending environment.”
Jason Tebb, President of OnTheMarket, comments on February UK HPI:
“Property values continued their steady rise on an annual basis in February, with the average price £3,000 higher than a year ago. Increased confidence and activity resulted in a strong start to the year for the market as a result of post-Budget clarity, although price increases are being kept in check by increased stock, more choice and continued affordability concerns.
The average UK house price conceals significant regional variations. Values in London continue to contract, by 3.3 per cent in the 12 months to February, due to increased supply and stretched affordability in the capital where property prices tend to be considerably higher than other parts of the country.
These figures are a little dated, and since then, the Iran war has had an impact on the market, with some buyers adopting a more cautious ‘wait and see’ approach. Others are focused and keen to proceed. Higher mortgage rates have raised affordability concerns, although a number of lenders have trimmed their rates in recent days as Swap rates have settled. Inflation rising to 3.3 per cent in March, with the potential for more to come, has tempered market expectations of further base-rate reductions for a while at least.”
Damien Jefferies, Founder of Jefferies London, commented:
“Today’s figures suggest that the UK property market is continuing to edge forward, albeit at a measured pace, with both monthly and annual growth remaining in positive territory.
However, with inflation surprising on the upside again today, there is a growing risk that interest rates remain higher for longer and could even increase further. This is likely to dent confidence to an extent and keep the rate of house price appreciation tempered over the coming months.”
Managing Director of House Buyer Bureau, Chris Hodgkinson, commented:
“For all of the talk that the property market is improving, we’re still seeing a growing number of sales collapse, and many sellers are simply giving up and withdrawing from the market altogether because they have become exhausted by the process and a lacklustre level of buyer activity.
The reality is that selling a home remains a long, uncertain and often costly experience. Buyers are taking longer to commit, affordability remains stretched, and chains are still incredibly fragile.”
Verona Frankish, CEO of Yopa, commented:
“Whilst the rate of house price growth remains fairly modest, the fact that prices are still moving in the right direction demonstrates that the market continues to hold firm despite a tougher economic backdrop.
Buyers have spent the last year adapting to a world of higher borrowing costs and greater uncertainty and, as a result, we’re now seeing a far more stable and sustainable market emerge, built on realism rather than rapid price inflation.”
Director of Benham and Reeves, Marc von Grundherr, commented:
“The latest figures show that the UK housing market remains remarkably resilient, with house prices holding firm despite renewed pressure on mortgage affordability and wider economic uncertainty.
London continues to lag the rest of the UK, with values down 3.3% year-on-year, but the capital remains a market of huge value and importance as a destination of choice for both domestic and international homebuyers.”
Matt Harrison, Customer Success Director at Finova Broker said:
“Inflation is proving far more stubborn than any of us could have anticipated at the start of the year. With tensions in Iran ongoing, we’re likely to see a rise in the base rate next week, ushering in a far longer period of elevated rates than many were hoping for and putting continued pressure on affordability.
We’re already seeing a more cautious approach from both lenders and customers alike. That said, the market is adapting. Brokers are becoming more creative in structuring deals, and lenders are refining products to support borrowers navigating higher costs. The key message is that while stability would have been welcome, resilience and flexibility remain essential in the current environment.”
Jonathan Hopper, CEO of Garrington Property Finders, commented:
“While data recorded on the eve of the war should be taken with a pinch of salt, these February numbers do still reflect several of the themes we’re seeing in today’s market.
Then as now, prices are coming under pressure in London and much of southern England. Average prices paid in the capital slumped by 1.9% in February alone, taking the annual fall to 3.3%. Prices were also down compared to the same time last year in the South East and the South West.
These pre-war falls were driven by old-fashioned fundamentals rather than post-conflict volatility. In many areas, the number of homes for sale exceeded the number of serious buyers and this forced sellers to lower their price expectations and, in some cases, accept offers considerably below asking price.
Since then, prices have cooled further, rather than collapsed. The traditional surge in new listings over the Easter weekend means buyers are truly spoilt for choice, and this has created a buyer’s market in which buyers call the shots on both tempo and price.
Meanwhile, transaction levels are more meandering than free-flowing. A combination of caution and the knowledge that they have time and choice on their side means most buyers won’t hesitate to walk away if both head and heart don’t feel a home is right.
That said, deals are being done by those who need to move rather than just want to move, and by those who calculate that lower purchase prices more than offset higher borrowing costs.
The volatile global backdrop is unsettling, but increasing numbers of buyers are realising that they will own their next home for much longer than the current volatility lasts – and that, for the well-informed, market threats can create market opportunities.”
Nathan Emerson, CEO of Propertymark, comments:
“While it is encouraging to see growth within the housing market, we sit in a phase where the forthcoming months are more difficult to foretell from an affordability viewpoint.
With the wider picture regarding inflation being very complex to fully envisage, the Bank of England will likely choose to approach the situation with extreme caution, as they make their next base rate decision at the end of the month.
Worst-case scenario, some people may find additional pressures being placed on their household finances across the coming months from three distinct angles. Inflation may push up prices on key household purchases, such as the weekly shop. Base rates could also see increases, affecting those with tracker products, as well as those taking on new mortgage deals, and we could see potential fluctuation in energy prices as well.
We may see an increased need for a cautious and thoughtful approach to household budgeting, particularly if the effects of global unrest continue to have an influence on our economy domestically.”
