Asking prices for newly listed homes were effectively flat in February, edging down by £12 to £368,019, as the market took stock following January’s unusually strong start to the year.
The subdued monthly movement contrasts with the typical 0.8% rise seen in February over the past decade.
However, January’s surge means prices remain 2.8% higher than in December, marking the strongest opening to a year since 2020.
The early momentum was driven by renewed confidence after the uncertainty surrounding the late Autumn Budget subsided.
FRONT-LOADED GROWTH
Sellers who had delayed listing returned to the market in force, front-loading price growth into January. By February, however, the weight of supply and more measured demand tempered further increases.
The number of homes for sale is at its highest level for this time of year in more than a decade, intensifying competition among sellers.
Buying activity, while steady, is softer than at the same point in 2025, when purchasers were racing to complete ahead of stamp duty changes in England.
Affordability dynamics are also shifting. Average asking prices are broadly unchanged year-on-year, while average earnings have risen by 4.7% over the same period.
Mortgage rates remain well below their post-mini-Budget peak, with the average two-year fixed rate at 4.28%, compared with 4.96% a year earlier.
“The market fundamentals haven’t changed.”
Colleen Babcock (main picture, inset) property expert at Rightmove, said: “Virtually flat prices in February really needs to be viewed alongside what happened in January.
“After the prolonged uncertainty in the run up to the late November Budget, plus the usual Christmas slowdown, we saw activity pick up again from Boxing Day.
“Many sellers, some of whom had been holding back because of the Budget, came to market in early 2026 with renewed confidence, which helped to drive that bumper January price rise.
“But the market fundamentals haven’t changed. There are still lots of homes for sale, and buying activity isn’t as strong as this time last year, when many buyers were rushing to move before the stamp duty increase in England.
“So in February, sellers have taken a more cautious approach by holding onto January’s gains rather than pushing prices higher, at a time when competition is high and the market is still very price-sensitive.”
GOOD TIME TO BUY
She added: “2026 is shaping up to be a good year to buy. Over the last three years average wages are up by around 17%, significantly outstripping property prices which are up by just 1.5% over the same period.
“A more favourable mortgage rate and lending environment are both also helping to improve buyer affordability.”
FIRST-TIME BUYER HELP
Matt Smith, Rightmove’s mortgage expert, said: “Last year’s review of the Loan-to-Income cap and reminder to lenders about stress testing flexibility by the FCA have had the intended positive outcome of enabling the typical buyer to borrow more.
“On top of this, there continues to be a strong focus from lenders on helping first-time buyers, with many lenders creating new products to help eligible buyers to borrow larger sums. This is a big contributor to improving affordability as both first-time buyers and home-movers are better equipped to borrow what they need and can afford to repay.”
SLUGGISH ECONOMY
Tom Bill, head of UK residential research at Knight Frank, added: “Plans put on hold by the Budget were activated either side of Christmas, which produced positive demand signals in January.
“However, buyers and sellers are operating against the backdrop of a Prime Minister on borrowed time and a sluggish economy.
“A leadership challenge may derail sentiment in the short term but demand in the longer-term will be shaped by the economic policy platform of any new Prime Minister and whether falling inflation can push down mortgage rates.”
