Nationwide Building Society said on Monday that the UK housing market proved ‘resilient’ through 2025 despite subdued consumer sentiment and mortgage rates that remained around three times their post-pandemic lows.
In its annual review and 2026 outlook, Chief Economist Robert Gardner said mortgage approvals stayed close to pre-Covid levels, helped by gradually improving affordability as earnings outpaced house prices and mortgage rates drifted lower.
He said annual house price growth slowed from 4.7% at the end of 2024 to 1.8% in November 2025, leaving prices close to the record highs seen in summer 2022.
‘With price growth well below the rate of earnings growth and a steady decline in mortgage rates, affordability constraints eased somewhat, helping to underpin buyer demand,’ Gardner said.
First-time buyer activity was above the long run average, supported by easier credit conditions and the highest share of high loan-to-value lending in more than a decade.
Nationwide said stamp duty changes that took effect in April prompted a spike in transactions in March as buyers rushed to complete before the deadline, followed by softer activity in the months after. ‘However, the underlying picture was little changed as demand held up well throughout,’ Gardner said.
Regionally, Northern Ireland was the clear outperformer, with annual house price growth averaging 11% in the first nine months of 2025, almost four times faster than the UK average. London was the weakest region, averaging 1.3% growth.
Nationwide expects housing activity to ‘strengthen a little further’ in 2026 as affordability continues to improve. It forecasts annual price growth of 2% to 4% next year.
It added that property tax changes announced in November’s UK budget are ‘unlikely to have a significant impact’ on the market.
A planned high-value council tax surcharge will not be introduced until April 2028, affecting fewer than 1% of properties in England, while higher taxes on property income may further dampen buy-to-let activity.
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