Nationwide Building Society said British house prices rose slightly faster than expected last month, pointing to a modest recovery following a dip at the end of 2025 that had been linked to uncertainty surrounding Finance Minister Rachel Reeves’ budget.
Prices were up 1.0% in the 12 months to the end of February, beating economists’ median forecast of a 0.7% annual increase in a Reuters poll. On a monthly basis, house prices rose 0.3% in February — matching January’s pace and edging above expectations for a 0.2% gain.
Nationwide Chief Economist Robert Gardner said the data reinforced signs of a gradual rebound after last year’s softness, likely driven by concerns over potential property tax changes ahead of the budget.
“Nevertheless, the number of mortgages approved for house purchase remains close to the levels prevailing before the pandemic,” Gardner noted.
Separate data due later on Monday from the Bank of England is expected to show a modest rise in mortgage approvals in January. Mortgage approvals are widely seen as a leading indicator of housing market activity.
Many investors believe the Bank of England could lower its benchmark interest rate to 3.5% this month, a move that would further support borrowing conditions.
Paul Dales, chief UK economist at Capital Economics, said the latest figures suggest that the housing market’s improvement at the turn of the year has continued. However, he warned that rising inflation risks — potentially triggered by events in the Middle East — could limit the scope for interest rate cuts and dampen housing momentum.
