Nationwide Building Society has reported a welcome boost for homeowners and the property market, with UK house prices rising by 0.3% in January 2026. This increase follows a surprise dip at the end of 2025 and adds approximately £195 to the value of the average British home.
Market Recovery After Festive Slowdown
The latest figures from Nationwide indicate that the traditional Christmas slowdown in the housing market has been firmly left behind. The average UK house price now stands at £270,873, representing a 1% increase compared to the same period last year. This positive movement suggests a resilient market regaining its footing after a period of uncertainty.
Expert Analysis on Market Momentum
Robert Gardner, Chief Economist at Nationwide, provided context for the recent fluctuations. "Housing market activity dipped at the end of 2025," he noted, "most likely reflecting uncertainty around potential property tax changes ahead of the budget." Despite this, Gardner highlighted that mortgage approval numbers remained robust, close to pre-pandemic levels, and expressed optimism for recovery in the coming quarters, especially if improving affordability trends continue.
Industry leaders have echoed this positive sentiment. Damien Jefferies, Founder of Jefferies London, observed, "The UK housing market has started the year with real intent. Buyer confidence has returned quickly, activity levels are rising, and momentum is building across the country." He specifically pointed to a clear uplift in London, with increased enquiries, viewings, and agreed offers as buyers who delayed decisions in 2025 return to the market.
Drivers of Renewed Confidence
Several key factors are underpinning this renewed market energy:
- Improving Affordability: A consistent trend noted by multiple experts, making homeownership more accessible.
- Falling Borrowing Costs: Easing mortgage rates are giving potential movers greater financial confidence.
- Post-Budget Clarity: The passing of the budget period has reduced uncertainty around potential tax changes.
Verona Frankish, CEO of Yopa, commented, "It’s back to business for the UK property market. The housing market has wasted no time in finding its stride again, and we’re seeing both buyers and sellers engaging with a far greater level of confidence."
Outlook for 2026
The early data suggests 2026 is poised to be a significantly more active year for the property sector. Marc von Grundherr, Director of Benham and Reeves, stated, "The property market has bounced back fighting fit following the festive break. It’s already shaping up to be a far stronger year for the market." He anticipates this will lead to reduced selling times, better achieved prices, and a higher volume of transactions overall.
This positive start to the year indicates a decisive shift from the caution of late 2025, with the UK housing market demonstrating underlying strength and resilience as it moves into a new phase of growth.
