House prices in the UK increased in February, avoiding a repeat of the “negative speculation” that depressed the market before last November’s budget, as Rachel Reeves prepares to present the spring forecast on Tuesday. The average price of a home rose to £273,176 last month, up by 0.3% from the month before, according to Nationwide, the UK’s biggest building society. It matched January’s monthly increase, and was above analysts’ forecasts of a 0.2% gain. The annual growth rate remained steady at 1%.
The chancellor’s imminent forecast has not led to a slowdown in the housing market, as speculation around property tax changes in the months leading up to last November’s budget did. Jason Tebb, the president of the property website OnTheMarket, said: “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.”
Robert Gardner, Nationwide’s chief economist, said the latest house price figures pointed to “a modest recovery after a dip at the end of 2025” driven by uncertainty around potential property tax changes before the budget. “Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected.” Housing market transactions climbed 10% last year compared with 2024.
Meanwhile, the number of new mortgages approved declined to 59,999 in January, the lowest in two years, the Bank of England reported on Monday. Net borrowing of mortgage debt by individuals dropped to £4.1bn in January, from £4.5bn in December. Despite this, the “effective” interest rate on new mortgages fell to 4.09% in January from 4.15% in December.
