The latest house price index from Nationwide indicates the positive start to the year continues into February, with improved affordability underpinning demand across the UK.
House price growth edged higher in the first month of 2026, up 1% annually and 0.3% month on month. Although market activity decreased slightly at the end of 2025, the number of mortgages approved remained close to the levels seen before the pandemic, Nationwide said.
“Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained,” chief economist Robert Gardner added.
“Our recent special report highlighted that affordability constraints have eased over the past year, thanks to earnings growth outpacing house price growth and also a steady decline in mortgage rates. This has helped underpin buyer demand, with first-time buyer activity over the last year continuing to edge higher as a share of house purchases.”
All parts of the UK, with the exception of Northern Ireland, saw an improvement in affordability over the past year. London saw the largest improvement, reflecting relatively weak house price growth along with solid earnings growth and lower interest rates.
“It’s encouraging to see the housing market gathering pace as we head further into 2026,” said Propertymark CEO Nathan Emerson.
“We have witnessed growing consumer confidence over the last 12 months, more competitive mortgage deals being offered by many lenders, and an increase in homes being placed for sale.
“Although inflation continues to play influence on the Bank of England’s base rate decisions, as we progress towards the spring it is hoped we may see further measured base rate cuts, which could further help invigorate overall affordability for many people who may have been cautiously keeping check on the market for their prime moment to jump into the buying and selling process.”
Damien Jefferies, founder of estate agents Jefferies London, said the figures signal a market “with real intent”. He added:
“Buyer confidence has returned quickly, activity levels are rising, and momentum is building across the country.
“In London in particular, we are seeing a clear uplift in enquiries, viewings and agreed offers, as buyers who delayed decisions last year return to the market. With conditions continuing to improve, 2026 is already shaping up to be a far more active and decisive year for the capital.”
Yopa CEO Verona Frankish agreed the property market is back in business. She said:
“The housing market has wanted no time in finding its stride again and we’re seeing both buyers and sellers engaging with a far greater level of confidence.
“This uplift in market momentum is being driven by improving affordability, with borrowing costs continuing to ease and, as a result, 2026 is already shaping up to be a far busier year for bricks and mortar.”
Marc von Grundherr, director of London estate agency Benham and Reeves, said the figures suggest a nation keen to make a move, which bodes well for the rest of the year.
“The property market has bounced back fighting fit following the festive break, with the reduction in house prices seen during December giving way to positive growth in 2026,” he said.
“This suggests that the nation’s homebuyers and sellers have wasted no time in putting their plans into motion, driven by improving affordability and the recent boost of a base rate cut.
“It’s already shaping up to be a far stronger year for the market and one that should see a reduction in selling times, improvements to the prices being achieved.”
