February 2026 Housing Market Update: Prices & What to Expect

Essential Insights for Buyers & Investors

The housing market across the United Kingdom has started 2026 with cautious momentum. After a steadier close to last year, February is revealing early signs of renewed activity , driven by shifting mortgage rates, Budget aftershocks and improving buyer sentiment.

Whether you’re planning to move home, step onto the ladder or expand a portfolio, here’s what the latest data and industry signals mean for the months ahead.

UK Market Snapshot: February 2026

The first quarter traditionally brings rising enquiries and 2026 is no exception, although confidence remains measured rather than exuberant.

Current snapshot:

• National prices are edging upward by 1 – 2% annually.
• Transaction volumes are improving compared with late 2025.
• Mortgage approvals are trending higher as lenders compete for borrowers.
• Stock levels remain tight in commuter belts and regional city centres.

Demand is strongest for energy-efficient homes, family houses near transport links and rental-ready flats in major employment hubs.

Key Trends Shaping the UK Housing Market

Several structural trends are becoming clearer this winter:

1. Mortgage Market Recovery

Following months of gradual easing, the Bank of England’s softer stance on inflation has filtered through to home loans, with more sub-4% fixed-rate deals returning.

2. Regional Outperformance

While prime central areas remain subdued, cities such as Manchester, Birmingham and commuter towns around London are seeing firmer competition.

3. Sustainability Premium

Buyers are increasingly paying more for homes with strong EPC ratings, insulation upgrades and heat-pump installations, a trend re-shaping valuations nationwide.

Market Impacts: What’s Driving Change

Several forces are interacting to steer the February market:

• Interest rate expectations: Buyers are acting ahead of potential spring reductions.
• Budget housing measures: Continued incentives for new-build delivery and regeneration schemes are supporting supply pipelines.
• Rental pressure: Persistent tenant demand is pulling investors back into selective buy-to-let markets.
• Cost-of-living stability: Falling inflation has slightly improved affordability metrics.

What This Means for You?

For Buyers

✔ Less frantic competition than boom years

✔ Growing choice of mortgage products

✔ Negotiating power on properties lingering on the market

For Sellers

✔ Improving enquiry levels

✔ Price-sensitive but motivated purchasers

✔ Spring market positioning opportunities

For Movers & Upsizers

✔ Chain-free buyers returning

✔ Greater lender flexibility

✔ Scope to secure before competition intensifies later in 2026

Investor Insight: Where Smart Money Is Looking

Savvy investors are targeting:

• Northern regeneration corridors linked to infrastructure upgrades
• University cities with chronic rental undersupply
• Build-to-rent schemes backed by long-term institutional funding
• Energy-efficient refurbishments that future-proof rental stock

Rental growth remains a central driver, with yields strongest outside the South East’s most expensive postcodes.

Key Takeaways

• 📈      Prices are rising modestly, not overheating.
• 🏦      Mortgage competition is returning.
• 🏘       Regional cities continue to outperform.
• ♻       Green homes command a premium.
• 💼      Investor interest is selectively strengthening.

Final Thought

February 2026 suggests the UK housing market is entering a measured recovery phase rather than a dramatic rebound. For buyers and investors prepared to act early and strategically, the coming months could present some of the most balanced conditions seen in years.

For tailored advice on whether to move, improve or invest this year, Move or Improve is ready to help you navigate the opportunities ahead.