Monitoring the housing market and activity in the mortgage market, is very important for many, particularly those doctors and dentists who are looking to purchase their first home or who are investing in buy-to-let properties. Our monthly Property Price & Mortgage Update gives you a summary of what the experts are saying.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it.
This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial product. Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
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Approved by Best Practice IFA Group on 24 February 2026.
UK Property Market Update
According to Nationwide, UK House price growth rose to 1% last month, up from 0.1% in December. This led to a 0.3% month-on-month price increase. The average house price came in at £270,873, down slightly from £271,068 in December.
UK Housing market shows resilience despite late-year slowdown
Housing market activity softened towards the end of 2025, largely reflecting uncertainty ahead of the Budget and speculation around potential changes to property taxation. Even so, underlying demand remained relatively stable. Mortgage approvals for house purchases stayed close to pre-pandemic norms, suggesting that while some buyers paused decisions, the market’s foundations remained intact.
Looking ahead, activity is expected to regain momentum over the coming quarters, particularly if the improving affordability trends seen throughout 2025 continue.
Improving affordability underpinned demand
One of the most significant developments last year was the easing of affordability pressures. Wage growth outpaced house price growth across much of the UK, while mortgage rates continued their gradual decline. This combination provided meaningful relief for prospective buyers and helped sustain transaction levels.
First-time buyers, in particular, played an increasingly important role in supporting the market. Over the past year, they accounted for a slightly larger share of overall house purchases, reflecting improved access to borrowing and better income dynamics.
In practical terms, the pressure has eased — even if affordability has not fully returned to historical norms.
Regional differences remain pronounced
Encouragingly, affordability improved across almost every part of the UK during 2025. The main exception was Northern Ireland, where strong house price growth outweighed income gains and falling mortgage rates. As a result, mortgage payments in the region now sit above their long-run average as a proportion of take-home pay.
London, meanwhile, recorded the largest improvement in affordability for the second consecutive year. Relatively subdued house price growth, combined with solid earnings growth and lower borrowing costs, helped narrow the gap. However, despite this progress, the capital remains by far the least affordable region in the UK.
Across the South of England, affordability pressures continue to be elevated. By contrast, buyers in the North, Yorkshire & The Humber, and Scotland are seeing mortgage payments that sit slightly below their long-run averages relative to income.
These regional variations are shaping very different buying experiences across the country.
Outlook for 2026
While uncertainty around fiscal policy created some short-term caution at the end of 2025, the broader trends point towards a gradual recovery. If wage growth continues to outpace house price growth and mortgage rates remain on a downward trajectory, affordability should continue to improve. That, in turn, would support renewed activity, especially among first-time buyers, who remain central to overall market health.
Mortgage Rate Update
Following the Monetary Policy Committee (MPC) meeting on 5 February, the Bank of England announced that the rate would remain 3.75%.
The MPC voted 5-4 in favour of holding the Bank Rate, with the 4 dissenters opting for a proposed cut to 3.5%. If the economy and inflation develop broadly as anticipated, there may be scope for further rate cuts later this year. However, decisions will continue to be guided by the latest data at each meeting to ensure inflation remains low and stable.
It’s crucial to stay informed by monitoring the British economy and global developments closely, as these factors majorly influence the Monetary Policy Committee’s (MPC) decision-making. Also taken into consideration are the speed at which prices are rising, the pace of economic growth, and employment statistics.
The next decision will be announced on Thursday, 19 March 2026.
Mortgages for Doctors and Dentists – Try Our Finder Tool
If you are planning to buy or sell property, contact an advisor for personalised mortgage advice.
Use our new and updated Mortgage Tool to search for a deal that suits your circumstances.
At Dental & Medical Financial Services, our advisers are dedicated to helping our clients select the right mortgage deal for your needs. If you are ready to take the fist step toward home-buying, contact us today.
Stay in the know
If you’re planning to buy or sell property this year, check back monthly for our regular update on the nation’s property prices and mortgage rates and contact one of our advisers for personalised advice.
At Dental & Medical Financial Services, our experts are dedicated to helping our clients select the right mortgage deal for their needs. If you’re ready to take the first step toward home-buying, get in contact with us today.
Sources
(1) Figures quoted from Nationwide House Price index – January 2026
