February Property Market Analysis

Although February was a short month, there was no shortage of property news. Many of the headlines came from the mortgage market but there was a base rate update, a Renters’ Rights Act development and house price news. Here’s what you may have missed.

The spotlight was on mortgages, with good news for first-time and owner-occupier buyers. It became cheaper to borrow money, with Rightmove announcing average monthly mortgage payments in January 2026 were 7% lower than a year ago.

Fixed-deal mortgage rates dropped below 4%

Zoopla agreed, adding that borrowers are experiencing the lowest mortgage rates for four years. The portal found rates attached to 2-year and 5-year fixed deals were below 4% for the first time since 2022. Competition between lenders and a stable base rate (left unchanged at 3.75% in February) are behind improving conditions.

Access and affordability improved

First-time buyers are among those who stand to benefit. Moneyfacts data published by The Guardian found there were twice as many 5% deposit mortgages aimed at first-time buyers in February 2026, when compared to the same month in 2024. The article also suggested lenders were loosening affordability rules to make borrowing easier.

Santander also signalled confidence in the housing market by launching its My First Mortgage product. First-time buyers can apply with a deposit of just 2%, as long as the deposit’s value is £10,000 or more. Although this loan might not be suitable for all first-time buyers, its introduction forces other lenders to be competitive, for everyone’s benefit.

With more borrowing power, focus shifted to the value of property. Zoopla’s latest house price index put the UK’s average house price at £269,900. While this represents a 1.3% annual increase, month-on-month values are stable. In fact, the UK’s average house price increased just £100 between December 2025 and January 2026.

Despite property values that continue to inch upwards, Zoopla declared a new affordability peak. It found 40% of homes for sale are now cheaper to buy with a mortgage than to rent, thanks to decreasing mortgage rates. Those looking to buy will find 6% more homes for sale now than Zoopla noted 12 months ago. 

And who will be at the front of the purchasing queue? New research by Pepper Money found the aspiration to be a homeowner still burns bright among the youngest generations. Its latest Specialist Lending Study found 85% of Gen Z hoped to buy their own home in the future. This compared 71% of Millennials, 47% of Gen Xers and only 17% of Boomers.

New tenancies with cheaper rents

How about rental values? HomeLet found tenancies agreed in January 2026 were cheaper for tenants when compared to December 2025. UK tenants are now paying an average of £1,302 per month – down 1.1%.

All but two UK regions saw rental values fall. Rents in the South East bucked the trend, rising 0.6%, while rents in the North West stalled. Everywhere else, rental values dipped – -0.2% in Wales, -0.4% in Scotland and -2.4% in London, with the capital the biggest value loser.

Delay for the Decent Homes Standard

February saw us busy preparing landlords for the introduction of the Renters’ Rights Act on 1st May 2026. While much of the legislation is set in stone, the Government made an announcement that will appease affected landlords. The introduction of a new Decent Homes Standard for private rentals has been delayed, with implementation not until 2035.

Landlords also started to see buy-to-let mortgages become more financially viable. Many specialist lenders used February to cut rates attached to their property investor products. Among those reducing rates were Landbay and Accord.

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