UK house prices maintained their pace of growth in February, with annual inflation unchanged at 1.0% and prices rising 0.3% month on month after seasonal adjustment. The average house price stood at £270,873.
According to Robert Gardner, the latest data points to a gradual recovery in activity following a weaker period at the end of 2025.
“Annual house price growth remained steady at 1.0% in February,” said Gardner, chief economist at Nationwide. “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.”
Market performance across 2025 showed a clear improvement compared with the previous year. Gardner pointed to higher transaction volumes and stronger buyer participation, particularly among first-time purchasers.
“Looking across 2025 as whole, total housing market transactions were 10% higher than in 2024,” he said. “As we explored in our Housing Affordability Report, improved affordability and an easing in credit availability has helped to support first-time buyer activity, with mortgage completions up 18% year on year.”
Activity among home movers also strengthened over the year, supported by better borrowing conditions and stabilising prices.
“Home mover transactions involving a mortgage have also recovered over the past year, with activity up 15% year on year,” he added.
Buy-to-let lending showed some signs of recovery, although levels remained well below historical norms. Gardner attributed this to ongoing pressures on landlords from borrowing costs and regulation.
“There has also been a gradual increase in the number of buy-to-let purchases involving a mortgage, although activity remains quite subdued compared to historic levels, reflecting the continued headwinds impacting this part of the market,” he explained. “For example, the higher interest rate environment tends to exert more of a drag on landlord demand (rather than owner occupier), while changes to the regulatory environment have also impacted landlord sentiment.”
Cash buyers continued to play a significant role in the market, although their share of transactions declined compared with recent years.
“Cash transactions last year were at a similar level to 2024,” he noted. “In recent years, there has been something of a decline in the share of cash purchases, which accounted for 35% of transactions in 2025, down from a peak of 42% in 2023.”
Gardner expects further improvement if affordability trends continue in the same direction.
“Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected.”
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.”
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."
Tom Bill, head of UK residential research at Knight Frank, said, “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.”
