The average asking price of newly listed homes was virtually unchanged in February, slipping by just £12 to £368,019 as the market paused following January’s record start to the year.
The flat reading compares with a typical 0.8% February rise over the past decade but January’s bumper increase means prices are still up 2.8% since December – the strongest start to a year since 2020.
The slowdown reflects a market adjusting after early confidence rebounded once Autumn Budget uncertainty lifted.
High stock levels and more measured buyer activity have prevented sellers from pushing prices higher, with the number of homes for sale at an 11-year high for this time of year.
IMPROVED AFFORDABILITY
At the same time, affordability has improved. Average asking prices are now level with a year ago, while average earnings are up 4.7% year-on-year.
Mortgage rates also remain close to their lowest levels since September 2022’s mini-Budget, with the average two-year fixed rate at 4.28%, down from 4.96% a year ago.
Colleen Babcock (main picture, inset), Property Expert at Rightmove, says: “Virtually flat prices in February really needs to be viewed alongside what happened in January.
“After the prolonged uncertainty in the run up to the late November Budget, plus the usual Christmas slowdown, we saw activity pick up again from Boxing Day.”
“The market fundamentals haven’t changed.”
She adds: “The market fundamentals haven’t changed. There are still lots of homes for sale, and buying activity isn’t as strong as this time last year, when many buyers were rushing to move before the stamp duty increase in England.
“So in February, sellers have taken a more cautious approach by holding onto January’s gains rather than pushing prices higher, at a time when competition is high and the market is still very price-sensitive.”
FIRST-TIME BUYER HELP
Matt Smith, Rightmove’s Mortgage Expert, says: “Last year’s review of the Loan-to-Income cap and reminder to lenders about stress testing flexibility by the FCA, have had the intended positive outcome of enabling the typical buyer to borrow more.
“On top of this, there continues to be a strong focus from lenders on helping first-time buyers, with many lenders creating new products to help eligible buyers to borrow larger sums.
“This is a big contributor to improving affordability as both first-time buyers and home-movers are better equipped to borrow what they need and can afford to repay.”
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “February’s flat price movement follows a strong January uplift, but with only two weeks of data available so far, it is difficult to form a clear and definitive picture of how the market will perform across the full month.
“Early indications suggest conditions may be stabilising rather than slowing, but we will need to see how the remainder of February unfolds.
“With wages rising faster than house prices and mortgage rates lower than a year ago, affordability is gradually improving, particularly for first-time buyers.
“An 11-year high in available homes means buyers have more choice, but it also underlines the importance of realistic pricing. In a competitive and price-sensitive market, professional guidance remains key.
“Overall, 2026 is shaping up to be a more balanced and sustainable year for the housing market.”
SLUGGISH ECONOMY
Tom Bill, head of UK residential research at Knight Frank, said: “Plans put on hold by the Budget were activated either side of Christmas, which produced positive demand signals in January.
“However, buyers and sellers are operating against the backdrop of a Prime Minister on borrowed time and a sluggish economy.
“A leadership challenge may derail sentiment in the short term but demand in the longer-term will be shaped by the economic policy platform of any new Prime Minister and whether falling inflation can push down mortgage rates.”
NATURAL PAUSE
Craig Webster, Managing Director, Tiger Sales & Lettings in Blackpool, says: “After a strong increase in January, the flatter pricing we are seeing in February feels like a natural pause rather than a slowdown.
“Sellers are becoming more realistic as competition remains high, but demand remains resilient.
“For buyers, conditions are improving. Mortgage rates are trending down, lenders are increasingly competitive and importantly wage growth has outpaced house price growth in recent periods, helping affordability.
“In markets like Blackpool, that combination means buyers who delay decisions can still end up paying more, as demand remains strong and competition increases during the spring market – even when headline prices appear stable. As we head into the busy spring market, those who are prepared and decisive are likely to be in the strongest position.”
BUYERS UNDETERRED
Tony Gambrill, Regional Sales Director at Chestertons, says: “Buyer activity has strengthened since the beginning of the year, with house hunters continuing their search despite some lenders recently raising mortgage rates.
While some buyers would have welcomed a cut in interest rates earlier this month, the majority remain undeterred and are proceeding with their property search regardless.”
REALISTIC SELLERS
Katie Griffin, Director at Sawdye & Harris in Dartmoor, says: “We are definitely seeing sellers being more realistic with their pricing this February compared to the optimism we saw in January. When there’s plenty of choice on the market, buyers can afford to be selective, and that’s keeping asking prices in check.
“For buyers, the conditions are looking quite positive. Mortgage rates have come down, wages are up, and lenders seem more willing to work with people to make borrowing viable. It’s a much better position than we were in this time last year.
“Spring is always our busiest time, and I think we’ll see improved activity if sellers continue to price sensibly. There’s genuine buyer demand out there – people have just been waiting for the right moment and the right property at the right price.”
