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House prices fall by 0.7%, rental growth slows

ended 18. February 2026

AVERAGE UK house prices increased by 2.4%, to £270,000, in the 12 months to December 2025, down from 2.8%, in the 12 months to November 2025, according to official data published this morning.

Average house prices increased to £292,000 (1.7%) in England, £215,000 (5.0%) in Wales, and £191,000 (4.9%) in Scotland, in the 12 months to December 2025.

Meanwhile, average UK monthly private rents increased by 3.5%, to £1,367, in the 12 months to January 2026, down from 4.0% in the 12 months to December 2025.

Average rents increased to £1,423 (3.5%) in England, £826 (5.8%) in Wales, and £1,021 (2.6%) in Scotland, in the 12 months to January 2026.

In Northern Ireland, average rents increased to £875 (5.6%), in the 12 months to November 2025.

In England, private rents annual inflation was highest in the North East (8.0%), and lowest in London (1.1%), in the 12 months to January 2026.

  • Are prices about to start rising again now that a Bank rate cut looks likely and swaps are falling?
  • Is lender innovation, coupled with slowing rental growth, helping more buyers onto the ladder?
  • Are we, as one slightly eccentric Newspager has argued this morning, potentially set to move quite quickly from a buyers' to a sellers' market?
  • Or are you an unbeliever and reckon the dire state of the economy and rising unemployment mean rates could plummet and buyers will still sit tight as they have no confidence?
  • How are demand and activity levels in your town/city/county right now (this is important as we are doing a big regional push)?

Any other thoughts, PRONTO please as we're writing this story now.

6 responses from the Newspage community

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Darryl Dhoffer
Founder at The Mortgage Geezer
Falling swap rates are finally driving down fixed rate mortgage costs, which is pulling more and more buyers off the fence. With lender innovation improving access and rental growth squeezing tenants, ownership is becoming the smarter play. Despite economic gloom, this rate relief is the spark needed to reignite the market. Demand is already firming up, signalling a swift shift back to a sellers' market and house prices rising is inevitable. If you're considering buying, now is the time to do do as prices could start edging up again very soon.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Slowing house price and rental growth is great news for aspiring homeowners, as less going out on rent means more money to save for a deposit, while a stalling market brings more properties into reach. The chances of first-time buyers getting onto the ladder are being further boosted by falling mortgage rates, with lenders competing very hard at higher loan-to-values. The one worry is that, with a Bank of England rate cut almost certainly incoming, sellers could once again get the upper hand. First-time buyers: be warned.
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Riz Malik
Independent Financial Adviser at R3 Wealth
If falling house prices and rate cuts don't get Britain moving, it's because they're not enough. Although there has been a flurry of activity from first-time buyers, those higher up the chain are usually faced with high barriers to move, the biggest of which is stamp duty. However, it is unlikely that anything will be done about this cash cow, given the fragility of the UK's finances. We are in a stalemate.
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Patricia Ogunfeibo
Founder & non-practicing Solicitor at tenant2owner
Anything that makes the housing commodity more affordable is very good. I suspect that the Renters’ Rights Act 2025 is having a downward effect on both rental and sales values. Tenants are aware of the security they will be getting (until a landlord decides to sell, or move themselves or a family member back in - if they can use this ground of possession - in both cases of which the court will have to grant possession irrespective of how good or bad the tenant is. Because of this, there’s less movement, and therefore less upward pressure on rents. On the sales flip side to the Act, many landlords are leaving the market and selling at whatever prices they can get, this is putting downward pressure on sales values. This presents amazing opportunities for FTBs to buy and take complete control of their accommodation needs. Having said, I suspect prices will start to uptick soon as most landlords who are going to sell are already listed; supply is therefore unlikely to keep rising.
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Richard Davidson
Mortgage Advisor at onlinemortgageadvisor.co.uk
For our clients, the close of 2025 was defined by the paralysis of the Autumn Budget. This uncertainty effectively froze the local housing market; buyers remained cautious on the sidelines, while sellers were forced to either accept lower offers or face a total lack of interest.

However, the sentiment in Nottingham has shifted significantly for 2026. With the growing expectation that inflation and interest rates will continue to ease, there is a much lower sense that there are nasty shocks in the economy ready to appear. Consumer confidence is returning to the city. This newfound optimism, coupled with a rental market that shows no signs of slowing, has revitalised demand. We are seeing more buyers enter the market, and importantly, they are now prepared to pay a premium for the right property.
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Justin Moy
Managing Director at EHF Mortgages
This data can typically lag behind the reality of the property market. Home buyers have certainly had enough of waiting for the government to intervene on the cost of buying, and with these spiralling rental figures, it's no coincidence borrowers are jumping on the improved mortgage rates and affordability. We have seen a number of 90/95% Loan-to-Value enquiries, with terms of up to 40 years, as buyers take the plunge whilst it is still their market.