House Price Inflation Cools After Record January Figures
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16 February 2026: Rightmove Optimistic As Affordability Improves
House price growth has flattened in February, according to Rightmove, although the property portal says January’s surge in asking prices means the market has seen the strongest start to the year since 2020, writes Kevin Pratt.
The average price of newly-listed homes for sale fell month-on-month by £12 in February, taking it to £368,019. However, prices are 2.8% higher than in December 2025, reflecting an upturn in sentiment following sustained but misplaced concern that last autumn’s Budget would heap higher taxes across the housing market.
Rightmove says the large number of homes coming to market has led to price stagnation in February, with potential buyers taking their time to find the right property. The number of homes for sale is at its highest for over a decade for this time of year.
But the portal still expects 2026 to be a good year for buyers and sellers alike, thanks to improved affordability and choice. It notes that, despite post-New Year increases, average prices are the same as a year ago, which it believes will benefit first-time buyers.
Several lenders have introduced deals that enable higher borrowing relative to income, with eligible borrowers able to secure loans of up to six times their earnings. The required deposit as a percentage of the purchase price has also been reduced on some mortgages.
Rightmove’s analysis shows that the average two-year fixed mortgage rate is now 4.28%, down from 4.96% in February 2025. It says average mortgage rates are near their lowest level since the Liz Truss mini-Budget in September 2022, which spooked bond markets and led to steeply higher borrowing costs.
It also points to the fact that average earnings are up 4.7% year-on-year, putting them ahead of cumulative property price growth since 2024.
Colleen Babcock at Rightmove commented: “Over the last three years, average wages are up by around 17%, significantly outstripping property prices, which are up by just 1.5% over the same period. A more favourable mortgage rate and lending environment is also helping to improve buyer affordability.
“For those who are ready to move soon, February could offer a useful window of opportunity to act before the peak spring selling season, when prices usually rise.”
Katie Griffin, director at Devon estate agency Sawdye & Harris, said: “We are seeing sellers being more realistic with their pricing this February compared to the optimism we saw in January. When there’s plenty of choice on the market, buyers can afford to be selective, and that’s keeping asking prices in check.
“For buyers, the conditions are positive. Mortgage rates have come down, wages are up, and lenders seem more willing to work with people to make borrowing viable. It’s a much better position than we were in this time last year.
“Spring is always our busiest time, and I think we’ll see improved activity if sellers continue to price sensibly. There’s genuine buyer demand out there – people have just been waiting for the right property at the right price.”
6 February 2026: Average Values Break £300,000 For First Time
The housing market kicked off 2026 on a ‘steady footing’ according to Halifax, the UK’s largest mortgage lender, with average house prices increasing by 0.7% in January, writes Laura Howard.
The rise compares to a fall of 0.5% in the previous month. On an annual basis, growth was up by 1.0% in January, also marking a rise on December’s figure of 0.4%.
The latest figures, which are derived from mortgage lending data, put the current average UK property value at £300,077 – the first time ever it’s been above £300,000 by Halifax’s reckoning.
Amanda Bryden, head of mortgage lending at Halifax, said: “While that’s undoubtedly a milestone figure, and activity levels show a resilient market, affordability remains a challenge for many would-be buyers.
“Broader economic conditions continue to provide some support. Wage growth has been outpacing property price inflation since late 2022, steadily improving underlying affordability. That’s a positive trend for buyers and the long-term health of the market.
“And we’re now seeing more mortgage deals below 4%. If inflation continues to ease, there should be further gradual reductions as the year goes on.”
However, this week has seen a spate of lenders, including HSBC, Nationwide, and Virgin, increasing the cost of fixes in response to rising wholesale swap rates, which help determine the cost of mortgages.
Yesterday, the Bank of England’s monetary policy committee (MPC) held interest rates at 3.75% in a close 5-4 voting split. The next decision is due on 19 March.
The UK average house price figure also masks more pronounced regional variations in price performance, said Halifax.
Northern Ireland continues to lead the UK in terms of growth, with average prices rising 5.9% annually to £217,206.
Scotland follows a close second, recording annual growth of 5.4%, taking the average property price to £221,711, while Wales saw a modest rise of 0.5% over the year, with the average home now costing £228,415.
Within England, the strongest growth remains concentrated in the north. The North West saw prices increase by 2.1% to £244,329, while the North East recorded 1.2% annual growth, bringing the typical property price to £181,198.
Southern regions – traditionally the strongest for property – continue to see prices soften, with the South East, South West, London and Eastern England all posting annual declines of more than 1%.
As the four most expensive areas of the country, these markets tend to be more sensitive to higher borrowing costs and property taxes, which can weigh on affordability and confidence, said Halifax.
Overall, the lender is sticking to its overall house price growth prediction of between 1% and 3% over the course of the 2026.
Nathan Emerson, chief executive at Propertymark, the estate agent trade body said: “As we progress further into the year, it is encouraging to see the housing market gathering pace. We are witnessing an increased flow of homes being brought to market, alongside growing confidence among buyers and sellers as they approach the moving process.
“Taking a broader view, lenders are also becoming increasingly competitive, expanding their range of mortgage products and improving access for those planning their next home move.”
Read More/Source Forbes