UK house prices held steady in February, with modest monthly growth and a marked increase in first-time buyer activity pointing to a housing market regaining momentum.
Figures from Nationwide Building Society show annual house price growth remained unchanged at 1.0% in February.
On a monthly basis, prices rose by 0.3% after seasonal adjustment, taking the average property price to £273,176.
The data suggests the market is stabilising following a slowdown at the end of 2025, when uncertainty around potential property tax changes ahead of the Budget weighed on buyer confidence.
MODEST RECOVERY
Robert Gardner, Nationwide’s chief economist, says: “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.”
Transaction levels across 2025 were 10% higher than in 2024, underlining a broader improvement in activity.
IMPROVED AFFORDABILITY
Improved affordability and slightly looser credit conditions have helped first-time buyers back into the market, with mortgage completions up 18% year on year. Home mover transactions involving a mortgage also rose 15% compared with the previous year.
Buy-to-let activity has shown some gradual recovery but remains subdued relative to historic levels. Higher borrowing costs and regulatory changes continue to weigh on landlord demand.
Meanwhile, cash purchases accounted for 35% of transactions in 2025, down from 42% in 2023, reflecting a shift back towards mortgaged buyers as market conditions stabilise.
Gardner adds: “Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected.”
For the property sector, the latest figures suggest a market that has found its footing. Price growth remains modest, but improving affordability and returning buyer demand are providing firmer foundations as the year unfolds.
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “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.”
SOLID BUT UNSPECTACULAR ACTIVITY
Tom Bill, Head of UK Residential Research at Knight Frank, says: “House price growth was flat in February as the post-Budget bounce tailed off.
“Activity levels have been solid but unspectacular in recent weeks but demand will strengthen if mortgage rates continue to head lower.
“However, a period of domestic political uncertainty caused by a Labour leadership challenge could take the edge of any recovery. A protracted conflict in the Middle East could also dampen sentiment or have an inflationary impact but it’s too early to assess the likelihood of either.”
IMPROVING AFFORDABILITY
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “Demand has picked up over the last month or so with buyers breathing a collective sigh of relief that Budget measures weren’t as potentially damaging as rumours would have us believe.
“There is added confidence that the spring statement today will prove even more of a non-event in terms of its influence over decision-making.
“We are finding worries about employment and the economy generally are of more concern now as well as over-supply, particularly of flats.
“Improving affordability and lending criteria means we are also seeing more first-time buyers. Stock levels have been reinforced by landlords ready to sell than renew existing tenancies in view of new tax and regulatory measures.”
DECISIVE BUYERS
Amy Reynolds, Head of Sales at Richmond estate agency Antony Roberts, says: “Sellers who price sensibly are being rewarded, particularly where stock is limited and demand is concentrated on good-quality, well-located homes.
“Buyers are more decisive and prepared to make strong offers to secure the right property.
“Activity is picking up as committed buyers re-enter the market. There is clear pent-up demand from those who paused decisions last year, and many are now keen to move before conditions shift again.
“As a result, agreed sales are increasing and well-priced properties are attracting competition.”
RESILIENCE CONTINUES
Jason Tebb, President of OnTheMarket, says: “Housing market activity and sentiment have continued to pick up this year, with buyers and sellers proceeding with their moves with more clarity and confidence, particularly as the Spring Forecast has not attracted anything like the same level of negative speculation as November’s Budget.
“The resilience the market demonstrated last year continues. Property values are being held in check to a degree as affordability challenges remain, although the data shows that much depends on whereabouts in the country you are.
“Sellers who price sensibly are more likely to attract interest, particularly in a market where there is more stock available and therefore increased choice for buyers in some areas.
“The series of interest rate cuts over the past 19 months has year sent a positive message to buyers and sellers, while helping ease affordability.
“Any further rate reductions will provide a similar boost and the early signs for the year are encouraging.”
