House prices rose 0.3% in January, following a decline to 0.6% in December
Annual house prices have seen a “slight pick-up” with an unexpected rise of 1% during the 12 months to January, after falling by 0.4% in December, according to Nationwide.
Prices grew 0.3% in January month-on-month, according to the building society’s index, with the average home now worth £270,873.
Robert Gardner, Nationwide’s chief economist, said: “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.”
Gardner said the dip at the end of 2025 “most likely” reflected the “uncertainty around potential property tax changes ahead of the Budget.”
In November 2025, Chancellor Rachel Reeves announced £26bn of tax increases, but delayed the implementation of most of them.
Nationwide said the number of mortgages approved last year haven’t yet reached pre-pandemic levels, but that affordability had helped drive first-time buyer activity in 2025.
All parts of the UK, with the exception of Northern Ireland, saw an improvement in affordability over the past year, Nationwide said.
Gardner said: “Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained.”
Separate figures released by Zoopla last week showed 1.2 million homes were sold in 2025, the highest since the pandemic.
Prices are expected to rise 1 to 3% this year, buoyed by lowest mortgage rates since 2022, according to Halifax.
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