"Price trends remain steady rather than strong, and the pattern varies by region, but overall, the market entered the year on a firm footing."
- Rob Owens - e.surv
Average house prices across Great Britain rose 1.8% year-on-year in February, reaching £329,000, according to the latest house price index from e.surv Chartered Surveyors.
The figures point to a market that entered 2026 on a stable footing, though the economic backdrop has grown notably more uncertain in recent weeks.
Regional performance is driving much of the national picture. Scotland recorded the strongest annual growth at 4.3%, followed by the North West and Wales at 3.4% each, and Yorkshire at 3.0%. London continues to lag, with prices falling 2.5% year-on-year, and conditions across the South remain subdued.
Valuation volumes running ahead of expectations
Despite the north-south divide, market activity has strengthened since the end of 2025. Mortgage valuation volumes ran ahead of expectations during January and February, with healthy engagement from both first-time buyers and movers. Historically, that level of valuation activity feeds through into completed sales within two to three months, suggesting the spring pipeline is building.
"We've started 2026 with strong activity supported by a pipeline that had been building since late 2025," said Rob Owens, head of research at e.surv. "Price trends remain steady rather than strong, and the pattern varies by region, but overall, the market entered the year on a firm footing."
Gilt yields and swap rate volatility unsettle lenders
The lending outlook has since become more complicated. Rising geopolitical tensions have pushed up gilt yields and increased swap rate volatility, creating a more unpredictable environment for mortgage pricing than many anticipated at the start of the year.
"The lending outlook has become more uncertain than many expected at the start of the year," Owens noted. "Reports suggest that some lenders have already begun adjusting mortgage pricing and withdrawing products in response. While rates remain well below the peaks seen in late 2023, lenders are clearly acting cautiously until funding markets stabilise."
What this means for UK landlords and property investors
For buy-to-let investors and residential landlords, the combination of modest price growth and shifting mortgage costs presents a mixed picture. Stronger rental yields in Scotland, Wales and the North of England may attract investors looking to diversify away from the capital, particularly if London's price weakness persists. However, any sustained increase in swap rates would push up refinancing costs across the board, compressing margins for leveraged investors already managing thin yields.
Affordability in Scotland, Wales and much of northern England continues to underpin stronger regional growth. The central question for the months ahead is whether buyer demand can remain resilient enough to offset weakness in London and the South if borrowing conditions tighten again. With lenders already adjusting products in response to funding market volatility, the spring selling season may prove more testing than the early valuation data suggested.
