British house prices picked up in annual terms in February, according to data released by mortgage lender Halifax, marking the strongest year-on-year increase since October.
Annual and monthly movements
Halifax said prices were 1.3% higher in the 12 months to February compared with the same period a year earlier. That outcome exceeded the 0.9% forecast in a Reuters poll of economists and followed an annual rise of 1.1% in January. On a monthly basis, Halifax reported a 0.3% increase in February, which matched the poll projection but was notably lower than the 0.8% monthly gain recorded in January.
Commentary from Halifax
Amanda Bryden, Halifax's head of mortgages, said the figures indicate the market has regained some momentum after a softer end to 2025. Bryden warned, however, that geopolitical uncertainties could affect inflation and the broader economy, and noted that markets are now expecting a more gradual pace of interest-rate reductions.
"These latest figures suggest the market has regained some momentum after a softer end to 2025," Bryden said. "Looking ahead, geopolitical uncertainties seem set to influence the outlook for inflation and the wider economy. Against that backdrop, markets are now anticipating a more gradual path for interest-rate reductions."
She added: "If realised, the speed at which borrowing costs ease may be tempered."
Interest-rate backdrop
The Bank of England is expected to keep its policy rate at 3.75% this month, after maintaining that level in February. Halifax and market commentary suggest that expectations for slower cuts in rates are linked to uncertainty around inflation driven by geopolitical developments.
Implications
The data points to a housing market that has regained some forward momentum in headline annual terms, while monthly growth has moderated from the start of the year. The interplay between inflation prospects and market expectations for the timing and speed of interest-rate reductions remains a key influence on borrowing costs and housing demand.
Data limitations
The report provides a snapshot of price movements to February and reflects market expectations and commentary at the time of release. It does not project future price levels beyond the observations and commentary supplied by Halifax and the prevailing expectations for central bank policy.