UK house price growth weakened at the start of the year while private rents continued to rise across much of the country according to the latest figures from the Office for National Statistics (ONS).
Average house prices increased by 1.3% in the year to January 2026, down from 1.9% the previous month, taking the typical UK property value to £268,000.
In England, prices rose by 1.1% to £290,000, while Wales recorded annual growth of 2.0% to £210,000 and Scotland saw prices increase by 1.3% to £188,000.
The figures point to a housing market that remains subdued following higher mortgage rates and ongoing affordability pressures.
RENTAL MARKET
Despite weaker price growth, the rental market continues to move in the opposite direction, with tenants facing further increases in monthly costs.
Average UK private rents rose by 3.5% in the 12 months to February 2026, taking the typical monthly rent to £1,374. The annual growth rate was unchanged from January, showing that rental inflation remains persistent.
In England, average rents increased by 3.6% to £1,430, while Wales saw the sharpest rise at 5.5%, with rents reaching £828. In Scotland, rents rose 2.4% to £1,022, and in Northern Ireland the latest available data showed a 5.2% annual increase, taking the average to £875.
Regional figures show the strongest rental growth is now outside London, with the North East recording the highest annual increase at 7.6%, compared with just 1.7% in the capital.
The latest data highlights the widening gap between the sales and lettings markets, with house price growth slowing while limited supply continues to push rents higher across much of the UK.
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “While it is encouraging to witness growth within the housing market year on year, it is also sensible to highlight that the coming months could represent a wind of change when considering the wider global economy.
“Even with inflation remaining steady this month, the prospect of any base rate cut when the Monetary Policy Committee next meets does feel potentially slim, especially when considering reports that many households will likely face considerable pressure from rising fuel and energy costs across the forthcoming months.
“We have witnessed a substantial number of mortgage products, some that previously offered sub 4% rates, now being withdrawn, leaving consumers with fewer choices and generally a tighter eligibility criteria to achieve, something that has the potential to impact first-time buyers especially.”
CHRONIC IMBALANCE
And he adds: “Rents have risen year on year, and across many regions of the UK, there remains a chronic imbalance between supply and demand in the private rented sector, with far too few homes available to meet tenant need. Affordability pressures persist, and Propertymark data shows that 17% of member agents have reported an increase in rental costs over this period.
“The operating environment for landlords continues to evolve at pace, with an expanding legislative burden and growing expectations around environmental compliance creating significant challenges.
“Renting remains most prevalent among those aged 25 to 34, a group that is increasingly facing barriers to saving for homeownership, further highlighting the long-term pressures within the sector.”
CALM BEFORE THE STORM
John Phillips, CEO of Spicerhaart and Just Mortgages, says: “Inflation holding firm in February is quite literally the calm before the storm as we anticipate and brace for a spike in inflation in the coming months.
“In truth, many are already overlooking today’s data in preparation of what is to come as the disruption caused by the conflict filters through to the UK economy.
“We’ve seen already a nailed-on cut turn into a hold and the promise of future cuts turn into the very real threat of rate increases. Even if the conflict stopped tomorrow, ‘Trumpflation’ is likely to linger on.
“We simply cannot put our heads in the sand and wait for it all to blow over.”
“We simply cannot put our heads in the sand and wait for it all to blow over. As we’ve seen in our latest figures for buyer registrations, valuation requests and mortgage appointments, clients still want and need support. While we are seeing thousands of products being pulled from shelves, either to be repriced or not to return, there are plenty of options still out there.
“As is often the case in uncertainty, the best course of action is to act early with quality advice and be prepared.
“Brokers play a crucial role in helping clients navigate a rapidly changing market, identify the best deals available and make informed decisions – particularly where opportunities exist to secure a better rate. Now more than ever, we need to keep reminding clients of this.”
REGIONAL DISPARITIES
Jason Tebb, President of OnTheMarket, says: “Property values continued their steady rise on an annual basis in January, 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 housing market, thanks to post-Budget clarity, although prices increases are being kept in check by increased stock, more choice and continued affordability concerns.
“Although a little dated, these numbers reveal wide regional disparities behind the average prices. Values in London continue to contract, by 1.7% in the 12 months to January, due to increased supply and stretched affordability in the capital where property prices tend to be considerably higher than other parts of the country.
“Inflation steady at 3% for a second consecutive month in the year to February would not normally be a cause for concern but since then, the inflationary pressures created by the Middle East conflict have removed market expectations of further base-rate cuts with suggestions of rises instead.”
PRICE REALISTICALLY
Colleen Babcock, Property Expert at Rightmove, says: “With the number of homes for sale now at its highest level in over a decade, buyers are benefiting from significantly more choice, and that competition between sellers is becoming more apparent.
“We’re seeing the longest average time to secure a buyer at this point in the year since 2019, with homes now taking around 64 days to find a buyer on average.
“This underlines how important it is for sellers to price realistically from the outset. In a market with plenty of available stock, homes that are priced correctly are better placed to attract early interest and secure a sale.
“While some movers may be taking a pause with their home-moving plans amid wider global uncertainty, overall activity has remained resilient.
“Sales agreed are just 3% below the busy market this time last year and still 15% ahead of 2024 levels. The market is still moving, albeit at a steadier and more considered pace as we head further into spring, despite ongoing global uncertainty.”
BUYER AND SELLER CAUTION
Tom Bill, Head of UK Residential Research at Knight Frank, says: “House price growth slowed following the uncertainty of November’s Budget as supply recovered more quickly than demand, but momentum was building as the traditionally busier spring period got underway.
“However, the Middle East conflict has dented sentiment and curbed spending power as mortgage rates have spiked in response to an expected increase in inflation due to higher energy costs.
“Housing market data will increasingly reflect the current caution felt by buyers and sellers, with downwards pressure on transaction volumes and prices likely in Q2 and possibly beyond. Only once the endgame in the Middle East becomes clear can we accurately assess any longer-term damage to the market.”
RENTERS’ RIGHTS ACT
He adds: “We expect upwards pressure on rents to intensify this year due to the arrival of the Renter’s Rights Act in May. Any extra inconvenience around setting rents or regaining possession of a property may prompt more landlords to sell and keep supply tight, which will have the unintended consequence of financially squeezing tenants.
“This has been particularly notable in the capital, where renting is traditionally more common and demand is higher.
“Tighter green regulations in future years could notably exacerbate this supply/demand problem for landlords and tenants.”
RATES DRIFTING UPWARDS
Nick Leeming, Chairman of national estate agency Jackson-Stops, says: “The market has started the year cautiously, with January’s figures showing modest growth and underlying resilience, amid a broader slow down late last year.
“From what we are seeing on the ground, buyers are willing to proceed where value stacks up, the home is well-presented, and the price is right – realistic pricing is king in today’s market.
“Looking ahead, with the situation in the Middle East remaining volatile, and interest rate expectations shifting, we’re likely to see some buyers move to get transactions agreed sooner rather than later.
“As rates are expected to drift upwards through the year, buyers are acting with greater certainty that current rates are more favourable than they may be in the months ahead, creating a short-term uplift in demand even as overall activity remains cautious.
“However, we remain in a fast-moving situation and expectations can change by the day
As a result, while the spring market should see healthy levels of activity, any upward movement in values is likely to be modest and increasingly location specific.
MARKET WOBBLE
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “Even before the start of Middle East hostilities there was a bit of a market wobble as we emerged from the late 2025 uncertainty.
“Since then, we have found in our offices worries over the direction of the economy has resulted in a reduction in the quantity of potential buyers, particularly the opportunistic sort, but not the quality.
“Deals are just about hanging together with little renegotiation so far. But confidence will inevitably begin to ebb the longer the conflict persists.
“The ’no change’ in inflation and base rate was a welcome relief but have been already superseded as neither cover the impact of the recent surge in energy prices. What’s happening now and likely to happen in the near future is of far more relevance to buyers and sellers.”
“We are continuing to see a shortage of stock, particularly prompted by landlords selling as tenancies end, due to worries about imminent tax and regulatory issues. This lack of stock and choice for tenants is supporting higher rents.
“However, over the past few weeks we have noticed some tenant resistance to paying more, bearing in mind increasing worries about the cost of living prompted by war in the Middle East.”
RESILIENT MARKET
Iain McKenzie, CEO of The Guild of Property Professionals, says: “With around 6% more homes currently on the market than a year ago, and further listings expected in the coming months, buyers now have greater choice.
“This is helping to keep upward pressure on prices in check, particularly in areas where affordability is already stretched.
“In this environment, pricing correctly from the outset is more important than ever. Sellers who understand their local market and set realistic expectations are still achieving sales in good time, with the average property in England and Wales taking around 40 days to find a buyer. However, we continue to see clear regional differences, with higher-value markets generally moving more slowly than more affordable locations.
“Overall, the market remains resilient, but it is increasingly defined by balance, more supply, cautious buyers and a continued focus on affordability. For both buyers and sellers, informed decision-making and realistic expectations will be crucial as we move through the year.”
INCREASED CAUTION
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. Mortgage rates have already edged upwards in response, and this is naturally becoming 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.”
