UK House Prices Rise Above Forecasts

The UK Nationwide House Price Index rose 1% year-on-year in February 2026, exceeding expectations of a 0.7% increase and matching January’s pace. On a monthly basis, prices went up 0.3%, in line with forecasts and the same pace as in January. Nationwide Chief Economist Robert Gardner noted this reflects a modest recovery following a dip at the end of 2025, likely linked to uncertainty over potential property tax changes ahead of the Budget. Mortgage approvals for house purchases remained close to pre-pandemic levels. Over 2025, total housing market transactions were 10% higher than in 2024, supported by improved affordability and easing credit availability. First-time buyer activity increased 18% year-on-year, home mover purchases up 15%, while buy-to-let activity edged higher but stayed subdued due to rates and regulatory headwinds. Gardner expects activity to continue recovering in coming quarters if affordability trends persist.

The UK Nationwide House Price Index rose 1% year-on-year in January 2026, surpassing the expected 0.7% and picking up from a 0.6% gain in December. On a monthly basis, prices increased 0.3%, in line with expectations, following a 0.4% decline in December. Nationwide Chief Economist Robert Gardner said housing activity dipped at the end of 2025, likely due to uncertainty over potential property tax changes, but mortgage approvals remained near pre-pandemic levels. He added that affordability improved over the past year, supported by earnings growth outpacing house prices and a steady decline in mortgage rates, helping sustain buyer demand. First-time buyer activity continued to rise as a share of purchases, with many buyers benefiting from relatively low mortgage payments. Regional variations persisted: London saw the largest improvement but remained least affordable, Northern Ireland worsened, while Scotland and parts of the North remained manageable.

The UK Nationwide House Price Index rose 0.6% year-on-year in December 2025, below market forecasts of 1.2% and easing from November’s 1.8% gain, marking the softest annual growth since April 2024. Compared to November, prices unexpectedly fell 0.4%, after taking account of seasonal effects, defying expectations of a 0.1% increase and reversing a 0.3% rise in the prior month, marking the first monthly decline in four months. Nationwide Chief Economist Robert Gardner said the slowdown in the year-on-year growth rate partly reflected strong price gains in December 2024 as well as the December 2025 price fall, and that the number of mortgages approved remained similar to levels before the COVID-19 pandemic. ” With price growth well below the rate of earnings growth and a steady decline in mortgage rates, affordability constraints eased somewhat, helping to underpin buyer demand," he added. Looking ahead, house price growth is expected to grow at an annual rate of 2% to 4% in 2026.