February Market Update

We’re in a good position to comment on this year’s market conditions, given two months have flown past. Demand that built towards the end of 2025 looks to have been released, with February giving us some positive indications. Here are the stats and stories you need to know.

1) Bank of England held the base rate: the first 2026 meeting of the Bank of England’s Monetary Policy Committee took place on 5th February. A stable fiscal picture led to the base rate being held at 3.75%. Predictions, however, lean towards base rate reductions later this year. 

Mortgage rates continued to slide

2) A new affordability apex: Zoopla reported the lowest mortgage rates for four years. It said both 2-year and 5-year fixed deals dipped below 4% for the first time since 2022. Investors also saw lower buy-to-let mortgage rates in February.

More first-time buyer mortgages

3) Improved product choice: Moneyfacts data revealed there were twice as many 5% deposit mortgages in February 2026, when compared to the same month in 2024. This news was complemented by the launch of Santander’s My First Mortgage product – a home loan open to first-time buyers with a 2% deposit.

4) House prices climbed modestly: Zoopla’s January 2026 report reinforced the notion that the sales market is pleasingly stable. The average house price in the UK is £269,900, increasing £100 between December 2025 and January 2026. Year-on-year, property values have risen 1.3%.

5) Sales surged ahead: despite there being fewer buyers in the market currently, compared to last year, the number of completions are rising. Zoopla found this February was the fourth strongest for sales in the last decade. The portal says the number of agreed sales will continue to increase.

6) Renting became more expensive than buying: Zoopla’s claim that 40% of homes for sale are now cheaper to buy with a mortgage than to rent will serve to further boost the number of successful sales. Those that choose to buy will find an excellent choice of homes. In fact, the portal said February was on track to record the highest monthly number of new listings in 10 years.

7)  Homeownership remained the goal: don’t be surprised if the most active future buyers are the youngest. Pepper Money’s latest Specialist Lending Study found 85% of Gen Zs still aspire to purchase their own home at some point in their lives. Gen Z was followed by 71% of Millennials, 47% of Gen Xers and just 17% of Boomers.

New tenancies became cheaper

8 ) Second consecutive month of decreases: HomeLet’s latest rental index provided an insightful overview of the UK’s rental market. New tenancies were 1.1% cheaper in January 2026, when compared to December 2025. The UK’s new average monthly rent is £1,302.

9) One UK region posted an increase: only the South East recorded a rent rise in January 2026, with rents for new tenancies increasing 0.6%. The next best performer was the North West, where rents flatlined. London saw the sharpest rental value decline (-2.4%). Rents also dipped in Wales (-0.2%) and Scotland (-0.4%).

Renters’ Rights Act updated

10) Announcement for English landlords: the Government announced it was pushing back the date for a key aspect of the Renters’ Rights Act. It confirmed a Decent Homes Standard for the private rental sector would not be introduced until 2035. Campaigners had hoped it would be implemented by 2030.

11) Energy announcement welcomed: ending February was news from Ofgem. The energy market regulator said the quarterly cap would drop by a substantial 7% from April 2026. Millions of households should see their energy bills decrease by £117.

If you would like to know more about your local property market, please get in touch.