Annual house price growth edged up from 0.6% in December to 1.0% in January and was up by 0.3% on a monthly basis, according to Nationwide’s latest HPI report.
Activity in the housing market had dipped at the end of 2025, as a result of uncertainty ahead of the Budget, although mortgage approvals for house purchase were close to pre-pandemic norms.
Nationwide says affordability has improved over the past year as earnings outpaced house price growth and mortgage rates declined. This helped underpin buyer demand, with first-time buyer numbers continuing to edge higher as a share of purchases.
London improvement
London had the biggest improvement in affordability for the second year running, although it remains the least affordable region.
Robert Gardner (main picture), Nationwide’s Chief Economist, says: “The start of 2026 saw a slight pick-up in annual house price growth, which rose to 1.0% in January, after slowing to 0.6% in December. Prices increased by 0.3% month on month in January, after taking account of seasonal effects.
Housing market activity is likely to recover in the coming quarters.”
“Housing market activity also dipped at the end of 2025, most likely reflecting uncertainty around potential property tax changes ahead of the Budget. Nevertheless, the number of mortgages approved for house purchase remained close to the levels prevailing before the pandemic.
“Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year (and explored further below) is maintained.”
Industry reaction
ESTATE AGENTS
Verona Frankish, CEO of Yopa
“It’s back to business for the UK property market with the seasonal slowdown in house prices seen during December now a distant memory.
“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.”
Amy Reynolds, Head of Sales, Antony Roberts
“Transactions are slowly improving, and values have proved resilient, particularly where homes are priced realistically.
“We’re seeing far more purposeful buyers than we did in the autumn, and assuming interest rates remain supportive, the spring market looks encouraging with momentum continuing to build. While this is not a runaway market, it is a far healthier one than a year ago.”
Nicky Stevenson, Managing Director, Fine & Country
“A modest rise in house prices last month is a reassuring start to the year for both buyers and sellers.
“The winter months tend to be quieter, so this uptick suggests there’s still firm interest in property, with buyers active where value and presentation align.”
Jeremy Leaf, Jeremy Leaf & Co
“Mortgage rates beginning to drift down again, with realistic prospects for more, is not only helping to enhance affordability but more importantly rebuild the confidence of buyers and sellers who were holding back before the Budget, fearing a more significant hit.”
Tom Bill, Head of UK Residential Research, Knight Frank
“House prices edged higher in December as certainty following the Budget triggered a flurry of deals before Christmas.
“However, mortgage approvals in the same month were 9% below the five-year average, showing that demand is still fragile.”
LENDERS AND BROKERS
Mark Harris, Chief Executive, SPF Private Clients
“The January sales borrowers were hoping for came to pass with a number of the big lenders trimming their mortgage rates in an effort to get the year off to a strong start.
“First-time buyers, who are so important for the functioning of the market, are returning, encouraged by lower mortgage rates at higher loan-to-values.”
Tomer Aboody, Director, MT Finance
“The housing market is the backbone of the UK economy, and even through the tough times with a looming Budget that was feared to have the potential to be hugely damaging, we have seen a stable market with buyers and sellers maintaining activity, albeit at a slower pace.”
INDUSTRY BODIES
Nathan Emerson, CEO of Propertymark
“It’s encouraging to see the housing market gathering pace as we head further into 2026. We have witnessed growing consumer confidence over the last twelve months, more competitive mortgage deals being offered by many lenders, and an increase in homes being placed for sale.”
Iain McKenzie, CEO, The Guild of Property Professionals
“The latest Nationwide figures show the housing market has begun 2026 on a steadier footing, with prices edging higher and annual growth picking up to 1%.”
PORTALS
Jason Tebb, President, OnTheMarket
“Housing market activity and sentiment have picked up since the Budget has been in the rear-view mirror, with buyers and sellers able to proceed with their moves with clarity and confidence.”
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