UK house prices rose in February, with the average home reaching £273,176, up 0.3% month-on-month, according to Nationwide. The annual growth rate held steady at 1%, matching January's increase and exceeding analysts' forecasts of 0.2%.
The market avoided the negative speculation that preceded last November's budget, as Chancellor Rachel Reeves prepares to deliver the spring forecast on Tuesday. Property experts noted that the current period has seen less uncertainty around tax changes, boosting buyer and seller confidence.
Nationwide chief economist Robert Gardner described the figures as a modest recovery after a dip at the end of 2025, driven by uncertainty over potential property tax changes. He expects housing market activity to pick up in coming quarters, supported by improved affordability and mortgage availability.
Housing transactions rose 10% last year compared to 2024, with first-time buyers expected to drive sales this year. However, new mortgage approvals fell to 59,999 in January, the lowest in two years, despite the effective interest rate dropping to 4.09%.
The Bank of England's next interest rate decision faces uncertainty after oil price spikes due to geopolitical tensions, reducing the probability of a March rate cut to 50%. Higher energy costs could complicate efforts to bring inflation down to the 2% target.
