LONDON, Feb 2 (Reuters) - British house prices rose by a stronger-than-expected 1.0% in the 12 months to January, after a blip at the end of 2025 linked to uncertainty around finance minister Rachel Reeves' budget, figures from Nationwide showed on Monday.
Nationwide said house prices were 1.0% higher than a year earlier, the biggest rise since November 2025 when Reeves announced 26 billion pounds ($36 billion) of tax increases but delayed the introduction of most of them.
Monday's rise was above the 0.7% forecast in a Reuters poll of economists, and compared with an annual increase of 0.6% in December.
House prices rose 0.3% in monthly terms in January after a 0.4% fall in December, in line with the poll forecast.
"The start of 2026 saw a slight pick-up in annual house price growth, Nationwide Chief Economist Robert Gardner said, adding that the dip in activity in December likely reflected uncertainty around potential property tax changes ahead of the budget.
"Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained," Gardner said.
Nationwide said affordability and demand from first time buyers appeared to have improved over the past year, and that the number of mortgages approved for house purchases remained close to the levels before the coronavirus pandemic.
But separate figures last week from the Bank of England, which is expected to keep its main interest rate at 3.75% on Thursday, showed that the number of mortgages approved by lenders - a leading indicator for house purchases - had fallen in December to its lowest since June 2024.
($1 = 0.7309 pounds)
Reporting by Suban Abdulla; editing by Sarah Young
Source: Reuters