HOUSE prices rose at the strongest rate for four months as the property market kicks on in 2026 with experts saying “the market isn’t booming, but it’s definitely moving”.
The housing market built on its steady start to the year in February, with average prices rising by 0.3%, following an increase of 0.8% in January, the Halifax House Price Index showed.
Annual growth also picked up to 1.3%, its strongest rate for four months. Since the start of the year, average prices have increased by around £3,000, with a typical property now costing £301,151.
Brokers and property experts said they have seen evidence of the market being back with a bang in 2026 – though they fear that the war in the Middle East will lead to higher inflation and that will feed into higher swap rates and higher mortgages in the weeks and months ahead.
Amanda Bryden, Head of Mortgages, Halifax, said: “These latest figures suggest the market has regained some momentum after a softer end to 2025. While industry data for January show a slight easing in new mortgage approvals, overall activity has continued to prove resilient.
“There’s no doubt that affordability remains stretched, supply is constrained, and regional disparities persist. For those without family support, the path to home ownership feels particularly challenging.
“However, conditions have been gradually improving, with easing interest rates and real wage growth helping to support buyer confidence. As ever, timely and expert advice remains key to helping more people achieve their goal of stepping onto the property ladder.
“Looking ahead, geopolitical uncertainties seem set to influence the outlook for inflation and the wider economy. Against that backdrop, markets are now anticipating a more gradual path for interest‑rate reductions. If realised, the speed at which borrowing costs ease may be tempered.”
Demand remains strong
Zaman Sheikh, Director of Northwood Chelmsford and WN properties estate and lettings agents in Shenfield and Chelmsford, said the Middle East war could dampen the positive news in the coming weeks.
He added: “The closing stages of 2025 were definitely soft, with the late November Budget causing many people to put their moving plans on hold until they knew what was announced. As the Halifax says, momentum has certainly picked up in the first two months of the year.
“This has been driven by lenders continuing to innovate on affordability, mortgage rates easing and the pent-up demand from the subdued fourth quarter of 2025. And while mortgage rates are moving up on the back of what’s unfolding in the Middle East, it’s too early to say this is the beginning of a major pricing reset.
“It could yet still prove a blip. Rates are still competitive and demand remains strong, but clearly there is a lot of uncertainty in the lending community at present.”
Babek Ismayil, CEO at homebuying platform OneDome, said lenders are already increasing their rates.
He continued: “It was a busy February, with first-time buyers, who lenders are really targeting at the moment, especially active. But the situation in the Middle East is already having an impact on mortgage rates, as markets price in inflation risk due to rising oil prices.
“Seeing a handful of major lenders increase rates in a day on Thursday is not the news borrowers wanted to see. There is every chance the conflict in the Middle East could prove inflationary, which could mean the Bank of England rate cuts many were expecting will not materialise for the time being.
“Once again, this rapid repricing highlights how fast the mortgage market can move and why there are no guarantees rates will only go in one direction.”
The market isn’t booming, but it’s definitely moving
Mike Staton, Director at Mansfield-based Staton Mortgages, said the figures show how resilient the market is.
He added: “This market has been far more resilient than the doom-mongers predicted. Despite higher interest rates, global chaos, and a government that seems determined to make running the economy look like a game of darts blindfolded, UK house prices are still hovering above £300,000.
“This is because people still need homes, demand still exists and despite the government’s manifesto promises, the UK still doesn’t build enough houses. At a time where we need all guns blazing to kickstart our sluggish economy, the housing market looks like it can be the defibrillator. The abolition of stamp duty would send the housing market rocketing.”
Patricia Ogunfeibo, Founder & non-practicing Solicitor at London-based tenant2owner, said the market was beginning to tick in the right direction in 2026.
She added: “There’s a lot of ‘looking’ activity in the market, but a lot less ‘buying’. The market was beginning to pick up, but the war in Iran is going to put paid to that.
“We’ve already seen mortgage rates going up. Landlords who are determined to sell will not be deterred by any of this, which will present even more opportunities for savvy first-time buyers to pick up even better bargains.”
The war in Iran is going to change things
Nick Harris, Founder at Wokingham-based Quarters, said February was a positive month for his business.
He continued: “The market isn’t booming, but it’s definitely moving. Buyers are just far more disciplined on price. February felt quietly positive, locally. It’s not the frenzy of the pandemic years, but there’s a steady stream of serious buyers who genuinely want to move. Much of the activity we’re seeing is needs-driven, for example, families upsizing, downsizers releasing equity and people moving for schools and lifestyle.
“First-time buyers are also more active than many expected as they’ve largely adjusted to current mortgage rates. Landlords are still relatively subdued, but demand for well-priced family homes remains strong. The key difference today is pricing: buyers are still there, but if a property is overpriced they simply move on to the next one.
“In markets like Wokingham where the supply of good family homes is still tight, that underlying demand tends to keep transactions ticking over even when mortgage rates fluctuate.”
Photo by James Buxton on Unsplash.
