The average cost of a home rose by 30bps on December, with annual property values climbing by 1% to £270,873.

Nationwide chief economist Robert Gardner said the property market had seen a downturn at the end of 2025.

He expects the market to recover in the coming months, especially if affordability continues to improve, in the form of mortgage rates falling and earnings growth rising faster than house price increases.

Gardner said: “Affordability pressures remain pronounced in the South of England, whilst in the North, Yorkshire and the Humber and Scotland, mortgage payments as a share of take-home pay are slightly below their long-run average.

“These regional variations in affordability have led to some stark differences emerging between those who would like to buy and those who can do so.”

Shawbrook sales and distribution director Louise Apollonio said: “Looking ahead, market activity is expected to continue on a steady incline, especially in light of the recent wage growth figures, which showed a year-on-year increase. This will be helpful for first-time buyers who are hoping to move forward with their property ambitions this year.

“Beyond this, the Renters’ Rights Bill coming into power in May could theoretically provide first-time buyers with the opportunity to get on the property ladder, as smaller landlords release more properties into the market. Whether or not this plays out has yet to be seen, but this paired with the push for more new homes is a definite step in the right direction.”

Together director of sales Tanya Elmaz said: “Although mortgage rates have fallen gradually over the past year, buyer confidence had remained subdued, particularly towards the end of 2025 amid uncertainty following the Autumn Statement.

“We would expect the property market to gather pace in the months ahead if inflation continues to ease and the Bank of England maintains its rate-cutting trajectory.”