UK housing market shows modest recovery, with activity edging back towards pre-pandemic norms
House prices in the UK grew by 1% year on year to £273,176 in February, according to the latest Nationwide House Price Index.
With values rising by 0.3% on a seasonally adjusted monthly basis, the data suggest a gradual recovery in housing market activity after weakness at the end of 2025.
“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,” said Nathan Emerson, chief executive of industry body Propertymark.
“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.”
Nationwide said mortgage approvals for home purchase are now close to their pre-pandemic levels, indicating a more stable flow of business for lenders and brokers than seen through much of the previous two years. Looking at the calendar year as a whole, total housing transactions in 2025 were 10% higher than in 2024, pointing to a broader market upturn.
First-time buyer activity has been a key driver. Nationwide reported that mortgage completions for first-time purchasers rose by 18% year on year in 2025, supported by some improvement in affordability and easier access to credit. For advisers, this continues to underpin demand for higher loan-to-value and longer term products, as well as affordability-focused solutions.
Home mover activity has also strengthened. Transactions involving a mortgage for existing owners increased by 15% over the year, suggesting that more borrowers are willing to adjust housing plans despite higher borrowing costs and ongoing economic uncertainty.
The buy-to-let market showed signs of life but remained subdued compared with historic norms. Nationwide highlighted a gradual rise in mortgaged buy-to-let purchases, but noted that demand from landlords is still being constrained by higher interest rates and regulatory changes affecting investor sentiment. For specialist lenders and brokers, this means a selective but still active segment, particularly where yields and product structures remain viable.
Cash transactions in 2025 were broadly unchanged from 2024. Cash buyers accounted for 35% of housing market transactions last year, down from a recent peak of 42% in 2023, indicating a modest shift back towards mortgaged purchases.
“Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected,” predicted Robert Gardner (pictured right), chief economist at Nationwide Building Society.
Emerson, however, stressed that a stable and balanced market, rather than rapid house price growth, is key to long-term sustainability and consumer confidence.
For Mark Harris, chief executive of mortgage broker SPF Private Clients, the interest rate backdrop remains central to how the spring market develops, both for residential and buy-to-let lending.
“The chances of another interest rate cut this month have improved as unemployment rises, inflation falls and economic growth is lacklustre,” Harris said. “This will provide a welcome boost as the weather continues to improve, and we move into the traditionally busier spring market.”
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