The latest House Price Index from the Office for National Statistics paints a picture of a housing market adjusting rather than accelerating, with annual price growth cooling and rental inflation easing. While the headline figures suggest a market finding a steadier footing, industry voices point to deeper shifts under the surface, from changing landlord strategies and regional divides to intensifying lender competition and renewed buyer urgency.
Alex Upton, Managing Director, Specialist Mortgages & Bridging Finance, Hampshire Trust Bank:
“While rental growth has moderated, the supply and demand imbalance remains firmly in place. Tenant demand continues to outstrip available stock, and landlord confidence is under pressure. In a market this finely balanced, even a modest reduction in supply can translate quickly into renewed upward pressure on rents.
Landlord behaviour is shifting. Expansion is no longer the default strategy. Many smaller investors are reassessing exposure where returns have been eroded by taxation and regulation, and some are choosing to exit selectively. At the same time, more professional landlords are consolidating and repositioning rather than retreating. There is a clear move towards assets that offer stronger income resilience, including HMOs, semi-commercial and mixed-use property. Incorporation remains a consistent trend, but it introduces complexity around structuring, tax planning and long-term funding.
These adjustments are changing the shape of funding demand. Landlords are not simply refinancing at maturity. They are releasing capital selectively, restructuring ownership, consolidating borrowing and adapting portfolios to reflect tighter regulatory requirements. That requires assessment based on judgement and experience, particularly where portfolios span multiple assets or income models.
A sustainable rental sector depends on confidence and clarity. If policy, taxation and funding conditions continue to feel uncertain, investment decisions will remain cautious. Over time, that caution feeds directly into supply. Stability in the rental market depends on consistent signals and finance that support long-term viability.”
Lee Williams, National Sales Manager at Saffron for Intermediaries comments:
“The final house price data for 2025 shows values continuing to edge upwards, extending the gradual recovery seen over recent months. Encouragingly, earnings growth has outpaced house price inflation, helping affordability improve. As a result, the price-to-earnings ratio for first-time buyers has eased further, pointing to a meaningful shift in accessibility for many entering the market.
Lenders have also entered the new year in a competitive mood, with a wave of new products and criteria enhancements following a busy end to 2025 for innovation. This renewed focus on flexibility is helping to unlock demand and is laying the foundations for a steadier, more confident market in the year ahead.”
Chris Storey, Chief Commercial Officer, Atom bank:
“This morning’s inflation data has poured fuel on a housing market that was already shifting into top gear. With inflation falling to 3.0%, the starting gun has officially been fired for a potential spring mortgage price war.
Speed has rarely been more important. Not only has the ONS reported a rise in house prices today, but we’re seeing the average price tag push through the £300,000 barrier for the first time, according to Halifax. We face the prospect of buyers racing to lock in deals before further price growth erodes the benefits of the now widely expected base rate cut next month.
With mortgage product choice at an 18-year high for those with low deposits and wages finally outstripping price growth, the pressure is now firmly on lenders and brokers to keep pace. Borrowers don’t have time to hang about for weeks on end; they need a ‘yes’ in hours or days. In this market, transparency and underwriting speed aren’t just ‘nice-to-haves’ – they are the only way to ensure buyers don’t get left behind.”
Nicky Stevenson, Managing Director at Fine & Country, comments:
“As winter arrived, so too did a cooling of annual house price growth, with 2025 finishing on a cautious note. However, this is a sign of a market settling into a more sustainable pace, rather than losing momentum and is typical of that time of year.
The fundamentals remain supportive, and while wage growth may be easing, there is improving certainty around borrowing costs. These conditions have helped keep buyers engaged, while sellers are increasingly adapting to a market that rewards realistic pricing and strong presentation.
In the current environment, good homes in the right locations can still attract healthy competition, but over-ambitious asking prices are far more likely to be challenged.
National headlines only ever tell part of the story. Local market conditions are doing the heavy lifting right now. While parts of the country continue to see solid growth, others are softer, and that gap is widening.
The North East remains the strongest-performing English region, while London continues to underperform, underlining how affordability constraints are shaping demand in higher-priced markets.
Looking ahead, these kinds of gradual adjustments from month to month are healthy to avoid pricing first-time buyers out of the market. As we move towards spring, activity typically picks up, and we expect many buyers who paused over Christmas to re-enter the market.
For sellers, the message is simple – price sensibly from day one and present the property well, because buyers have more choice and they’re making decisions with their heads as much as their hearts.”
Commenting on house prices, Nathan Emerson, CEO of Propertymark, comments:
“A slowing in the annual growth of house prices signals ongoing affordability pressures and cautious buyer sentiment. While modest price adjustments may improve access for some purchasers, reduced activity can dampen overall market confidence.
Ensuring a supportive lending environment and increasing housing supply will be critical to maintaining stability and encouraging sustainable levels of market activity.”
Commenting on rental prices, Nathan Emerson, CEO of Propertymark, comments:
“A slowing in the annual growth of rents may offer some relief for tenants, but can also be attributed to localised shifts in demand or changes in supply dynamics.
“However, month on month, rent levels continue on an upward trajectory; therefore, policymakers must focus on creating conditions that encourage investment and maintain adequate rental stock to ensure the sector remains stable and able to meet housing need over the long term.”
Lee Williams, National Sales Manager at Saffron for Intermediaries comments
“The final house price data for 2025 shows values continuing to edge upwards, extending the gradual recovery seen over recent months. Encouragingly, earnings growth has outpaced house price inflation, helping affordability improve. As a result, the price-to-earnings ratio for first-time buyers has eased further, pointing to a meaningful shift in accessibility for many entering the market.
Lenders have also entered the new year in a competitive mood, with a wave of new products and criteria enhancements following a busy end to 2025 for innovation. This renewed focus on flexibility is helping to unlock demand and is laying the foundations for a steadier, more confident market in the year ahead.”
Jodi Spreadbury, Senior Mortgage and Protection Broker at The Mortgage Broker, said:
“Today’s official figures show a housing market that’s still moving, but not racing ahead. The average UK home is now £270,000, around £6,000 higher than a year ago, and prices are up 2.4% annually. But with prices down 0.7% in December, it is clear buyers are still price-conscious, and sellers need to stay realistic.
The regional split is also telling. Wales and Scotland remain stronger over the year, but Scotland saw the biggest monthly fall, which is another reminder that this isn’t a straight line upwards.
For first-time buyers, this is the kind of market where preparation really pays off. Prices are rising modestly, but not fast enough to justify rushing. If you have your agreement in principle in place and your paperwork ready, you’re in a stronger position to negotiate and to secure the right property at the right price. It also reflects how tough it’s been to get on the ladder, with government survey data for England putting the average first-time buyer at 34, and 35 in London.
For homeowners coming off a fixed rate this year, the key message is to start early. Don’t drift onto a higher rate by default. Review your options in good time and choose a deal that keeps your monthly budget comfortable, even if other household costs rise.
For buy-to-let landlords, it’s a margin game. Rents are still increasing, but the pace is easing, so deals need to stand up based on yield, costs and realistic assumptions, rather than relying on future price growth.
Overall, this is a market where sensible budgeting, good advice and being organised are what make the difference.”
John Phillips, CEO of Just Mortgages and Spicerhaart, said:
“It’s positive to see inflation rebound from its seasonal blip and return to its downward trajectory. While still higher than the 2% target, inflation seems to be performing as the central bank expects. All eyes are now on next month’s MPC decision as the central bank responds to this news, as well as the recent rise in unemployment and sluggish economic growth. While opinion is still split on how far cuts will go this year, there is increasing optimism around a cut in March, which would be great news for borrowers.
January provided a strong start to the year, and that has continued into February with robust buyer registrations and increasing demand for both valuations and mortgage appointments. Even with half-term disruptions, we’re looking at a really positive month as buyers get plans back on track – buoyed by high levels of product choice and continued innovation. As this momentum continues, brokers play a critical role in demonstrating to new and potential borrowers what the market has to offer, leveraging their deep knowledge and partnerships with a broad range of lenders to help clients achieve their ambitions.”
Martin Sims, Distribution Director at Molo Finance said:
“A further step down in inflation towards 2% strengthens the case for at least one more Base Rate cut this year, which would be positive news for landlords and residential buyers, and provide a renewed boost of confidence to the property market.
We are already seeing renewed interest in UK property from overseas investors and Hamptons has reported that one in five newly incorporated buy-to-let companies in 2025 is owned by non-UK nationals, up from 13% in 2016. Company formations are running 8% ahead of 2024’s total, with around 67,000 expected by year end and, of those, roughly 13,500 will be owned at least in part by non-UK nationals.
For expat investors, a clear move back to target inflation will signal greater economic stability. The UK’s deep rental market and long history of recovery continue to support its reputation as a relative safe haven. Lower inflation can ease pressure on tenants’ household bills, which supports rental payments and overall portfolio performance. It can also lead to sharper product pricing and more workable stress testing.
If inflation settles at 2%, it is likely to spur further activity in buy to let. Investors who have been waiting on the side lines may see this as the point to refinance, expand or enter the market with a clearer view on rates.”
