Britain’s largest building society has reported that UK house prices continued their gradual upward trajectory in February, with annual growth holding firm at 1.0 per cent.
Figures released by Nationwide show property values edged up by 0.3 per cent on a monthly basis, matching the pace recorded in January.
The typical UK home now costs £273,176, according to the lender’s latest data.
Both the yearly and monthly rates of increase were unchanged from the previous month’s readings, indicating a stable start to the year for the property market.
Robert Gardner, chief economist at Nationwide Building Society, said: “Annual house price growth remained steady at 1.0 per cent in February. Prices increased by 0.3 per cent month-on-month, after taking account of seasonal effects.”
The figures point to a modest recovery following a softening in prices towards the close of 2025.
Mr Gardner said the weakness seen at the end of last year was most likely linked to uncertainty surrounding potential property tax changes in the run-up to the Budget.
He said: “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.”
Typical UK home reaches £273,176 in February
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Despite the temporary slowdown, mortgage approvals for home purchases have remained close to pre-pandemic levels, suggesting underlying demand has been resilient.
Looking ahead, Mr Gardner signalled confidence in the market’s direction over the coming months if affordability continues to improve.
He said: “Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected.”
First-time buyers have been particularly active over the past 12 months, supported by easing affordability pressures and improved access to mortgage finance.
Total property transactions rose by 10 per cent compared with the previous year
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Across 2025, total property transactions rose by 10 per cent compared with the previous year, reflecting stronger overall market activity.
Mortgage completions among those purchasing their first home increased by 18 per cent year on year, according to Nationwide’s Housing Affordability Report.
Existing homeowners seeking to move also returned to the market in greater numbers, with mortgage-backed transactions in this segment climbing 15 per cent over the same period.
The buy-to-let sector experienced a modest increase in mortgage-financed purchases, although activity remains subdued by historical standards as elevated borrowing costs and regulatory changes continue to weigh on landlord sentiment.
Cash purchases accounted for 35 per cent of all transactions in 2025, down from a peak of 42 per cent in 2023, indicating a greater reliance on mortgage borrowing compared with recent years.
Property market analysts offered mixed assessments of the outlook for the months ahead
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Property market analysts offered mixed assessments of the outlook for the months ahead, particularly in relation to interest rates and inflation.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said inflation had been forecast to fall back to the Bank of England’s two per cent target by April, potentially paving the way for a further quarter-point base rate reduction.
She said: “However, an increasingly uncertain geopolitical backdrop amid renewed tensions in the Middle East may scupper that expectation if energy prices rise dramatically and supply chains are disrupted by the conflict.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said a base rate cut would “provide a welcome boost as the weather continues to improve and we move into the traditionally busier spring market”.
Tom Bill, head of UK residential research at Knight Frank, said recent activity had been “solid but unspectacular” and suggested demand could strengthen further if borrowing costs continue to ease.