The February house price index from Nationwide reinforces the view of a modest recovery following a dip at the end of last year, the building society has reported.
The number of mortgages approved for house purchase are close to pre-pandemic levels, Nationwide’s chief economist Robert Gardner pointed out, with improved affordability and an easing in credit availability helping to support first time buyer activity and prompting an 18% increase in mortgage applications year-on-year.
“Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected,” Gardner said.
Annual house price growth remained unchanged at 1%, with prices up 0.3% month on month.
“Today’s figures from Nationwide show continued upward movement in house prices, reflecting resilient demand in many parts of the UK despite ongoing affordability constraints,” Propertymark CEO Nathan Emerson said.
However, he warned that more new homes are needed to sustain the market.
“While rising prices may signal confidence in the market, they also reinforce the need for policies that support supply and improve access for first-time buyers. Without increasing the number of homes available, sustained price growth risks further stretching affordability.
“Propertymark member agents continue to report that well-priced homes are attracting strong interest. However, a stable and balanced market, rather than rapid price inflation, is key to long-term sustainability and consumer confidence.”
Iain McKenzie, CEO of The Guild of Property Professionals, said the figures reflect a market finding its feet.
“With prices holding steady and annual growth unchanged at 1%, alongside a modest 0.3% monthly uplift, we’re seeing clear signs of a measured recovery rather than a rapid rebound,” he explained.
“One factor keeping price growth in check is the elevated level of supply, giving buyers both great choice and negotiating power. This is helping to stabilise values even as demand begins to improve. This balance is healthy for the market and supports sustainable growth rather than short-term spikes.”
The latest transaction data from HMRC reinforces the picture of a market in transition, he added, and predicted pent-up demand could be released as conditions improve.
“Encouragingly, the direction of travel for borrowing costs is positive. Falling inflation, now at 3%, its lowest level since March 2025, combined with expectations of base rate cuts from the Bank of England, is feeding through to more competitive mortgage pricing. Lenders are actively vying for business, and improved affordability, particularly for buyers with larger deposits, should help unlock activity as the year progresses.
“Looking ahead, we expect momentum to build gradually through 2026. While geopolitical uncertainties could influence inflation, the broader trajectory points towards easing monetary policy and improving buyer confidence. In this environment, sales volumes are likely to strengthen, and the market should continue its steady, sustainable recovery.”
Jason Tebb, president of OnTheMarket, said the figures demonstrate the ongoing resilience seen throughout the last year.
“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,” he commented.
“The series of interest rate cuts over the past 19 months has year sent a positive message to buyers and sellers, while helping ease affordability. Any further rate reductions will provide a similar boost and the early signs for the year are encouraging.”
