House prices have started the year on the up, according to the latest figures from Nationwide Building Society.
The price of the average home rose by 0.3 per cent in January and is now 1 per cent higher than a year ago, according to Britain’s largest mutual.
The monthly rise has been adjusted for seasonal effects to take account of months when the housing market is typically more or less active.
In non-seasonally adjusted terms, house prices were £270,873 in January 2026, up from £268,213 the previous January – a rise of £2,660.
The rise has been helped by the fact that buyer demand has rebounded in recent weeks. Separate Zoopla data suggests enquiries to estate agents are now tracking in line with 2024 levels.
House price rise: Prices increased by 0.3% month-on-month in January, after taking account of seasonal effects, according to Nationwide
This follows a period of sluggishness leading up to the late November Budget, when property tax rises had been rumoured.
Nicholas Finn, managing director of Garrington Property Finders, described this as ‘The uncorking of demand that many people kept bottled up during an uncertain 2025.’
He added: ‘The sense that the abundance of supply, coupled with the fact that many areas in the south saw prices soften last year, has made this an attractive time to buy. Homes have become more affordable and buyers are spoilt for choice.’
Cheaper mortgage rates have also helped, according to industry experts.
Justin Moy, managing director at Chelmsford-based EHF Mortgages, said: ‘There has been an uptick in activity post-Christmas as buyers wake up from their Budget fatigue and push on with their plans to move.
‘Improved mortgage affordability has certainly helped some of our clients borrow more to buy larger properties, avoiding troublesome leasehold flats on the property ladder.’
Housing market activity also dipped at the end of 2025, with mortgage approvals in the same month being 9 per cent below the five-year average.
While mortgage approvals are down and prices yet to show any meaningful change, there are some signs that the market is picking up.
More affordable: Someone buying a typical first-time buyer property with a 20 per cent deposit would have a monthly mortgage payment equivalent to 32 per cent of their take-home pay
Nationwide said are looking more affordable with earnings growth outpacing house prices alongside a steady decline in mortgage rates.
Its main affordability benchmark shows that a prospective buyer earning the average UK income and buying a typical first-time buyer property with a 20 per cent deposit would have a monthly mortgage payment equivalent to 32 per cent of their take-home pay.
While that is slightly above the long-run average of 30 per cent, it is well below the recent high of 38 per cent recorded in 2023 when mortgage rates peaked.
All parts of the UK, with the exception of Northern Ireland, saw an improvement in affordability over the past year,’ said Robert Garnder, chief economist at Nationwide.
‘For the second year running, London saw the largest improvement in affordability, reflecting relatively weak house price growth in 2025, solid earnings growth and lower interest rates.
‘Affordability pressures remain pronounced in the South of England, whilst in the North, Yorkshire and The Humber and Scotland, mortgage payments as a share of take-home pay are slightly below their long-run average.’