House price growth remained stable in February, with the latest Nationwide House Price Index showing annual growth unchanged at 1.0% and prices rising by 0.3% month on month. The figures point to a modest but steady recovery in the housing market following a dip at the end of 2025, as improving affordability and easing credit conditions continue to support buyer demand. Activity levels remain resilient, with mortgage approvals close to pre-pandemic norms and first-time buyer transactions driving much of the momentum.
Experts react to the latest data, and what it means for the market:
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
“Annual house price growth remained steady at 1.0% in February. Prices increased by 0.3% month on month, after taking account of seasonal effects.
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. Nevertheless, the number of mortgages approved for house purchase remain close to the levels prevailing before the pandemic.
Looking across 2025 as a whole, total housing market transactions were 10% higher than in 2024. As we explored in our Housing Affordability Report, improved affordability and an easing in credit availability have helped to support first-time buyer activity, with mortgage completions up 18% year on year.
Ian Futcher, financial planner at Quilter:
“House prices appear to be off to a steadier start in 2026, according to Nationwide’s latest house price index, rising by 0.3% in February, which matches the 0.3% uptick seen in January. Annual house price growth was also unchanged, rising by 1%, which brought the average house price to £273,176.
While this suggests a gradual recovery compared to the dip seen towards the end of last year, we are unlikely to see a marked uplift in house prices for a while yet. Residential property transactions data out last week show that despite the slight easing of mortgage rates and more competitive offerings being brought to the market by lenders, the market remains very much subdued. On a seasonally adjusted basis, residential transactions were down 5% compared to December 2025, and were marginally lower than January 2025. On a non-seasonally adjusted basis, these figures jump to a 24% drop and a 3% fall respectively.
While lenders are vying for business and bringing cheaper products to the table, as well as higher loan-to-income and loan-to-value offerings, affordability is still stretched. With the prospect of further rate cuts throughout 2026, many will be holding out in hopes of securing a cheaper deal later down the line. Until rate cuts are more clearly evidenced and there is significant downward pressure on mortgage rates, prompting more people to put moving plans back in motion, we can expect house prices to remain relatively stagnant.
“Mortgage rates are typically set well in advance of any Bank of England interest rate changes, so if we see them ease further in the coming months as cuts are anticipated, affordability pressures will lessen. Buyer confidence has been low in recent years, but an improving rate outlook could see demand, and subsequently house prices, pick back up.”
Daniel Austin, CEO and co-founder at ASK Partners, said:
“Today’s modest rise in UK house prices points to underlying resilience, but momentum remains constrained by affordability pressures and a ‘higher for longer’ interest rate backdrop. While recent rate cuts signal easing inflation, they are unlikely to transform market conditions overnight. Mortgage pricing has improved, yet buyer and developer confidence remains fragile following a Budget that offered little direct stimulus for housing.
The market is increasingly being shaped by structural rather than cyclical forces. The UK’s forecast 1.4 per cent growth rate, relative outperformance versus the eurozone, and sustained interest from Gulf and Southeast Asian capital continue to support long-term confidence. However, mainstream buyer activity remains subdued, with demand instead flowing into structurally undersupplied rental markets, particularly build-to-rent and co-living in well-connected suburban and commuter locations.
While proposed planning and affordable housing reforms may improve scheme viability at the margin, elevated construction and financing costs will continue to pressure margins in the near term. A clearer downward path for rates towards the 3.5 per cent range would help unlock stalled projects. Until then, capital is favouring resilient, income-led segments such as logistics, data centres, storage and other operational real estate, with real estate debt offering an attractive way to generate secured income while managing downside risk in a still-cautious market.”
Nicky Stevenson, Managing Director at Fine & Country, comments: “A modest rise in house prices last month suggests the market is continuing to regain its footing in a measured and sustainable way. This is not a sharp movement, but it is a boost for sellers, following a softer end to 2025.
Annual growth holding steady at 1% is also encouraging and hits that balance that appeases both buyers and sellers alike.
Demand is still there, but we are seeing that buyers are making decisions carefully and with a clear eye on value. That kind of steady, considered activity is often a healthier backdrop for the market than rapid price jumps.
February is typically the point in the property calendar when momentum begins to build again. By this stage, the post-Christmas slowdown is behind us, buyers have had time to review their finances, and many are starting to act on plans. That makes a modest rise at this point in the year a positive signal.
Nationwide’s figures also underline the importance of improving affordability, particularly for first-time buyers. When entry-level demand is strengthening, it tends to support confidence across the wider market and helps keep the chain moving.
Success for sellers looking to market their homes will come from understanding genuine buyer appetite and responding to local conditions, rather than expecting blanket price growth across the board. The level of stock in many areas of the country is still high and that variety gives buyers a strong hand that must be met with a fair pricing strategy from sellers.”
Nathan Emerson, CEO of Propertymark comments:
“Today’s figures from Nationwide show continued upward movement in house prices, reflecting resilient demand in many parts of the UK despite ongoing affordability constraints.
While rising prices may signal confidence in the market, they also reinforce the need for policies that support supply and improve access for first-time buyers. Without increasing the number of homes available, sustained price growth risks further stretching affordability.
Propertymark member agents continue to report that well-priced homes are attracting strong interest. However, a stable and balanced market, rather than rapid price inflation, is key to long-term sustainability and consumer confidence.”
