House prices rose by 0.3% month on month in February, while annual growth remained steady at 1.0%, according to the latest Nationwide House Price Index.
The lender said the figures reflect a modest recovery that began in January after prices had dipped at the end of 2025.
The lender’s data also shows mortgage approvals for house purchase are now close to pre-pandemic levels, with activity during 2025 running ahead of the previous year. Total housing transactions rose by around 10% compared with 2024, supported by improving affordability and easing credit availability.
Positive sign for the wider housing market
In a positive sign for the wider housing market, first-time buyer activity strengthened during the course of the year, with mortgage completions up 18% year on year, while home mover transactions involving a mortgage rose 15%. Buy-to-let purchases involving a mortgage also increased, but far more gradually, and they remain below their longer-term norms, which Nationwide attributes to higher borrowing costs and regulatory pressures.
Cash purchases accounted for 35% of transactions in 2025, down from a peak of 42% in 2023, as the gradual return of mortgage-supported demand continues on the back of improving borrowing conditions.
Commenting on the figures, Nationwide Chief Economist Robert Gardner said the latest release reinforced the view of “a modest recovery” after the late-2025 slowdown.
Looking ahead, he added: “Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected.”
Higher levels of stock giving buyers more choice
Estate agents said the Nationwide data reflected the conditions they were currently experiencing on the ground, with higher levels of stock giving buyers more choice and helping to keep prices in check. They said this was leaving sellers under more pressure than they have been to price realistically in order to secure interest and agree sales.
Iain McKenzie, CEO of The Guild of Property Professionals, says February’s figures pointed to “a measured recovery rather than a rapid rebound.” He adds, though, that the direction of borrowing costs remained important, with improving affordability and stronger lender competition expected to support activity as the year progresses.
And Jeremy Leaf, a north London estate agent and former RICS residential chairman, says he has seen demand pick up in recent weeks, adding that buyers appeared more confident following the Budget and were responding positively to improving affordability and lending conditions.
Prime market momentum stalled
At the prime end of the market, however, Knight Frank says momentum remained subdued. According to Tom Bill, its head of UK residential research: “House price growth was flat in February as the post-Budget bounce tailed off. Activity levels have been solid but unspectacular in recent weeks, but demand will strengthen if mortgage rates continue to head lower.”
Mortgage brokers are also reporting stable house prices, which they say are the result of improving lending conditions as rates ease and lender competition increases. Mark Harris, chief executive of broker SPF Private Clients, says: “Enquiry levels are strong as buyers who put decisions on hold last year now feel ready to proceed, particularly as improved affordability is making them feel more confident about committing to a property purchase.”
