UK house prices rebound at start of year, Nationwide Building Society says

The average price of a property has increased by 0.3% in January to £270,873

Published Mon, Feb 2, 2026 · 04:40 PM

Economists have predicted a stronger year for the UK property market, after the patchy performance and small price gains seen in 2025. PHOTO: EPA

[LONDON] UK house prices recovered at the start of 2026, Nationwide Building Society said, largely reversing a dip in the weeks after the Labour government’s tax-raising Budget.

Nationwide said the average value of properties rose by 0.3 per cent in January to an average price of £270,873 (S$471,479), in line with economists’ expectations – after a 0.4 per cent fall the previous month.

Prices were 1 per cent higher than a year earlier.

Economists have predicted a stronger year for the property market, after the patchy performance and small price gains seen in 2025.

However, some overhang from Chancellor of the Exchequer Rachel Reeves’ latest tax hikes may remain. The hikes included a new levy on homes worth more than £2 million that will take effect in 2028.

Economists have also warned that rising unemployment and still-elevated mortgage rates may constrain the market, even as Budget uncertainty lifts.

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Data on Friday (Jan 30) showed that demand for home loans was weak in December, with mortgage approvals falling to its lowest in 18 months.

Figures from UK finance data provider Moneyfacts suggested the average two-year fixed mortgage rate has fallen to 4.85 per cent from around 5.5 per cent a year ago.

Borrowing costs, however, remained much higher than they were before inflation took off after the pandemic.