House prices rise by 1.2% annually ‘reflecting sellers being realistic’

The average UK house price rose 1.2% annually in February, edging up from a 1.0% increase in the year to January, according to Office for National Statistics (ONS) figures.

Across the UK, the average house price in February was £268,000.

Average house prices increased in February to £290,000 (0.8% annual growth) in England, £210,000 (2.5%) in Wales, and £187,000 (2.3%) in Scotland.

In Northern Ireland, the average house price was £196,000 in the fourth quarter of 2025, marking a 7.5% annual increase.

Yorkshire and the Humber was the English region with the highest house price inflation, at 3.9%, in the 12 months to February.

In London, average property values fell by 3.3% annually in February – the seventh month in a row where the capital recorded an annual fall in house prices and the weakest annual change since January 2024, when prices fell by 3.5% on average.

The report was released as the ONS said the rate of Consumer Prices Index (CPI) inflation increased to 3.3% in March, from 3% in February.

The increase was in line with predictions from economists, with the conflict in the Middle East pushing up price rise expectations.

Many lenders have cut the fixed mortgage rates they are offering in recent days, as swap rates, which are used by lenders to price mortgages, have eased.

“Higher inflation typically leads to higher interest rates, but if a resolution can be found and inflation peaks at a lower level than originally feared, it could calm the need for base rate hikes.

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“That would see fixed rates continue to fall, but there’s still a substantial number of ‘ifs, buts and maybes’ at play.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Affordability concerns are once again an issue for borrowers, as mortgage rates headed upwards on the back of expectations that interest rates would stay higher for longer.

“However, in recent days there has been some relief as a number of lenders have reduced their fixed-rate mortgages, including Santander, HSBC and Skipton – a trend we hope to see continue in coming days.”
Nicky Stevenson, managing director at Fine & Country, said: “These figures relate to a period before some of the more recent cost pressures and volatility in everyday bills fed into household budgets, so it will be important to see how the next few months play out for confidence and affordability.

“ Activity is improving now that we are firmly into spring, but it is still a market where buyers can take their time, compare options and negotiate.”
Looking at the rental market, the ONS said average UK monthly private rents increased by 3.4% annually to £1,377 per month in March.

The annual growth rate eased from 3.6% in the 12 months to February.

Average rents in March increased to £1,434 (3.4% annual growth) in England, £830 (4.8%) in Wales, and £1,022 (2.1%) in Scotland.

In England, private rents annual inflation was highest in the North East (6.5%), and lowest in London (1.7%), in the 12 months to March.

In Northern Ireland, average rents increased to £880 in January, marking a 5.0% increase over the year.

Richard Donnell, executive director of research at Zoopla, said: “Sellers have to be realistic on price, which they are currently, explaining why prices are only rising at 1.2%.

Ian Futcher, a financial planner at wealth manager Quilter, said: “Changes in mortgage costs do not feed through to house prices immediately.

“The sharp rise in borrowing costs seen after February is more likely to weigh on activity and sentiment in the spring and early summer data, particularly among first‑time buyers and more rate‑sensitive parts of the market.

“Looking ahead, the outlook for house prices will depend largely on how geopolitical risks evolve.

“If tensions ease further and energy‑driven inflation pressures recede, mortgage rates could continue to edge lower, supporting broadly flat prices rather than a sharp correction.”