Annual house price growth remained steady at 1.0% in February.

Prices increased by 0.3% month on month, after taking account of seasonal effects.

The Nationwide, which produces these figures, says this reinforces the view of a modest recovery after a dip at the end of 2025, reflecting uncertainty around potential property tax changes ahead of November’s Budget.

Nevertheless, the number of mortgages approved for house purchase remain close to the levels prevailing before the pandemic.

Home mover transactions involving a mortgage have also recovered over the past year, with activity up 15% year on year.

There has also been a gradual increase in the number of buy to let purchases involving a mortgage, although activity remains quite subdued compared to historic levels.

Nationwide says this is reflecting the continued headwinds impacting this part of the market.

For example, the higher interest rate environment tends to exert more of a drag on landlord demand (rather than owner occupier), while changes to the regulatory environment have also impacted landlord sentiment.

Cash transactions last year were at a similar level to 2024. In recent years, there had been something of a decline in the share of cash purchases, which accounted for 35% of transactions in 2025, down from a peak of 42% in 2023.

The lender says housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected.