Annual house price growth sees 3.9% increase in February, says Nationwide

The annual rate of UK house price growth reached 3.9% in February 2025, a slight dip from 4.1% last month, according to Nationwide’s latest house price index.

The average cost of a home was £270,493 (not seasonally adjusted) in February, while this number was £260,420 in the same month last year.

Meanwhile, house prices are up 0.4% month-on-month from £268,213 in January 2025, representing the “sixth consecutive monthly gain”, according to Robert Gardner, chief economist at Nationwide.

He said: “Housing market activity has also remained resilient in recent months, despite ongoing affordability challenges. Indeed, the second half of 2024 saw a noticeable pick up in total housing transactions, which were up 14% compared with the same period in 2023.

“However, taking 2024 as a whole, transactions were still modestly (6%) lower than the levels prevailing before the pandemic struck in 2019.

“In terms of the pattern of transactions, it is notable that first-time buyer activity continued to recover, with mortgage completions in 2024 just 5% below 2019 levels. This represents a solid performance, given the interest rate environment – for example, five-year fixed mortgage rates are currently around 4.4% (for borrowers with a 25% deposit) compared to c2% in 2019.”

Stamp duty changes were announced in the Autumn Budget, including the removal of temporary reliefs for first time buyers in April in England and Northern Ireland.

Gardner said this would “generate volatility in transactions in the near term, as buyers bring forward their purchases to avoid the additional tax.

“This will likely lead to a jump in transactions in March, and a corresponding period of weakness in the following months, as occurred in the wake of previous stamp duty changes.”