Written by Jodi Spreadbury, Senior Mortgage and Protection Broker, The Mortgage Broker
Book a free appointment with Jodi, here.
The February 2026 UK House Price Index (UK HPI) update shows a housing market that’s still moving, but one that isn’t racing ahead.
The average UK home now sits at £270,000, which is up 2.4% year-on-year (around £6,000 higher than a year ago). However, prices also fell 0.7% in December, which is a clear signal that buyers are still price conscious and sellers need to stay realistic when putting properties on the market.
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Quick snapshot: what the latest UK HPI is saying
- UK average house price: £270,000
- Annual change (UK): +2.4%
- Monthly change (UK): -0.7%
- England: £292,000 (+1.7% yearly)
- Wales: £215,000 (+5.0% yearly)
- Scotland: £191,000 (+4.9% yearly, -1.7% monthly)
- London: £551,294 (-1.0% yearly)
Why this update matters (and why you should not overreact)
This UK HPI release is based on December 2025 pricing and it matters because it captures what buyers and sellers are feeling across the market: activity is happening, but it’s certainly more negotiated than it was during boom periods.
A falling month does not explain the market on its own just as one swallow does not make a summer. But, it does indicate that pricing and presentation matter, whilst buyers are pushing back where they think the numbers are optimistic.
The regional picture is doing the talking
The split across the UK is telling us some interesting information.
Over the year, Wales (+5.0%) and Scotland (+4.9%) remain stronger than England overall (+1.7%). But Scotland also posted the largest monthly fall (-1.7%), which is a useful reminder that this isn’t a straight line upwards and there will be bumps in the recovery.
London of course stands out for a different reason/ Prices there were down 1.0% annually, showing how sensitive higher priced markets can be when affordability tightens across buyers.
If you are a first-time buyer, preparation always beats panic
This is exactly the kind of market where preparation pays off and the need to be mortgage ready is highlighted. You can read more about getting mortgage ready in this blog here, by one of my colleagues John Noakes at The Mortgage Broker.
Prices are rising modestly, but not fast enough to justify rushing. If you have an Agreement in Principle (AIP/DIP) in place (a lender’s early indication of what you may be able to borrow) and your paperwork ready, you are in a stronger position to negotiate and to move quickly when the right property appears.
It also reflects how tough it has been to get on the ladder with the Government survey data for England stating the average first-time buyer at 34, rising to 35 in London.
First-time buyer “mortgage-ready” checklist (simple, but decisive)
- Get your Mortgage in Principle in place before you view seriously (also called Agreement in Principle, Decision in Principle – all one and the same)
- Line up your proof of deposit (and gifted deposit paperwork if relevant)
- Keep your bank statements clean: avoid new credit and “random” spending spikes. If you have bad credit you can still plan and makes steps to get a mortgage with bad credit.
- Know your maximum monthly comfort level for expenditure, not just what a calculator says and ensure you get the right advice so you know all the costs, and not just the headline interest rate
If your mortgage fixed rate ends in 2026, start early (or you really could pay for it)
If you are coming off a fixed rate this year, the key message is simple: start early and ask your mortgage adviser to monitor the market.
Do not leave it until the last minute and risk drifting onto a higher rate by default. Give yourself time to compare options properly, including product transfers with your current lender and remortgage alternatives, so your monthly budget stays comfortable even if other household costs rise.The market fluctuates, and this could enable you to lock in a better rate at the right time.
This is not the year to leave it until the last minute and hope it works out.
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If you’re a buy-to-let landlord, it’s a margin game
For buy-to-let landlords, relying on future price growth is lazy underwriting and there is far more to consider with changes in costs and structure.
Yes, rents are still rising, but the pace is easing. The latest ONS data shows UK private rents up 3.5% year-on-year (to January 2026), and this slowdown matters if your costs have moved faster than your rent.
So deals need to stand up based on:
- yield (net, not headline)
- stress-tested mortgage costs
- realistic running costs and void assumptions
- tax position (especially for higher-rate taxpayers)
If the numbers only work when you assume strong house price growth, it is not a plan but rather a very one dimensional form of hope.
Our stance on the market
Overall, this is a market where sensible budgeting, good advice and being organised are what make the difference between a smart approach and one that you may quickly regret.
You must eliminate the hype and the guesswork by not rushing to reacting what you saw in a headline.
And if you’re selling take the monthly drop seriously as buyers are still negotiating hard, and the properties that are priced right (and presented well) are the ones that will move in this market.
FAQs people are asking right now (forums, Reddit, and real buyers)
Lenders typically look at your income, regular outgoings, existing credit commitments, your deposit size and your credit file. They are assessing whether the mortgage looks affordable and sustainable for you, not just whether you can justify the costs on paper.
First Homes is a local-authority led scheme, so availability and criteria can vary by area. In general, you must be a first-time buyer and be able to fund the purchase with a mortgage (often at least 50% of the discounted price). Always check the local eligibility rules before you commit to a property.
Treat it like a cost and risk exercise, not an emotional one. You can ask for repairs, renegotiate the price, or walk away, depending on severity and budget. Your solicitor and surveyor are the right people to help you understand exposure and options.
A gifted deposit can still be acceptable, but it does not override credit history. You usually need a clear gifted deposit letter and evidence of the funds trail. A broker can help you understand which lenders are more flexible for your circumstances.
LIFT is a Scottish shared equity route designed to help certain buyers who struggle to buy on the open market. Eligibility depends on your circumstances and the specific LIFT route you use. If you’re buying in Scotland, you should check the latest Scottish Government guidance and local availability.
You need to check whether early repayment charges apply on your current deal and when they end. Many homeowners plan ahead so a new deal can start when the penalty window closes, rather than paying charges unnecessarily.
Most lenders ask for photo ID, proof of address, proof of income (payslips or accounts/tax documents if self-employed), bank statements, and proof of deposit. If your situation is more complex (multiple incomes, recent changes, credit issues), expect extra checks.
You normally need your lender’s consent before letting a residential property. Depending on the situation, the lender may grant “consent to let” or require a buy-to-let product. Not telling the lender can create problems later.
It can be possible, but it means moving unsecured debts onto a secured loan against your home. That increases the stakes. You should understand the total cost over time and the risks before doing anything.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The big ones are: viewing without an AIP/DIP, underestimating total costs (legal fees, surveys, moving, insurance), taking new credit during the process, and negotiating without evidence. Being organised is a genuine advantage right now.
A lower LTV usually improves product availability and can reduce the rate and lender risk view. It can also make underwriting smoother, especially where income is complex or the property is less “standard”.
A buy-to-let mortgage is designed for properties you intend to rent out, not live in. Lenders often focus on rental coverage and require larger deposits. The right setup depends on your goals, tax position, and longer-term plans.
Not typically. In the UK, you usually pay council tax and utilities directly, and you arrange buildings insurance (often required by the lender). The comparable “gotchas” here are service charges, ground rent (leasehold), and unexpected maintenance costs.
Many people look at life insurance, critical illness cover, and income protection so the mortgage and household budget are more resilient if something goes wrong. The right cover depends on your commitments, dependants, sick pay, and savings buffer.
Auction buying can be fast and unforgiving. You typically need money ready for fees and deposit requirements, and you must do legal checks upfront. You also need to be realistic about refurb costs and timelines.
The bottom line
The UK market is not stalling but it is far from giving anyone a free ride.
- If you are buying, being organised helps you negotiate and move quickly when it matters.
- If you’re remortgaging, starting early protects your monthly budget.
- If you’re investing, the deal has to work on today’s numbers, not tomorrow’s assumptions.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Need to talk it through? Call us on 
0800 0320 316 or use the button above to get started.
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Author: Jodi Spreadbury, Senior Mortgage and Protection Broker
View all posts by Jodi Spreadbury 
