They say money makes the world go round and it certainly was the case in February. In particular, the month was full of very encouraging mortgage news. Improving lending conditions have created a positive backdrop as we head towards spring.
The groundwork was laid by the Bank of England. Its Monetary Policy Committee voted to hold the base rate at 3.75% on the 5th February 2026. The stability boosted confidence among both lenders and borrowers.
More choice for first-time borrowers
First-time buyers are set to enjoy emerging and favourable conditions. An article by The Guardian featuring Moneyfacts data revealed home buying novices now have the biggest choice of low-deposit mortgages for 18 years. February’s 537 first-time buyer deals at 95% loan to value was almost double that available in the same month during 2024.
Buy with a deposit as low as 2%
There was also good news for first-timers finding a 5% deposit a stretch too far. Santander launched its My First Mortgage home loan in February, requiring a deposit as low as 2% (minimum deposit value £10,000). This five-year fixed deal has a rate of 5.19%, zero product fees, £250 cashback and a maximum 40 year repayment term.
It’s not just first-time buyers who are seeing benefits. Credit Connect confirmed average mortgage rates for new home loans have reached their lowest level for 4 years. Rates on two- and five-year fixed deals are below 4% for the first time since 2022.
Zoopla says it’s no coincidence that lower mortgage rates have occurred at the same time as a buoyant sales market. Its latest house price index, released at the end of February, linked a rising number of homes for sale with better mortgage affordability. The portal said there are 6% more homes on the market now than a year ago.
Zoopla’s key metrics also showed the release of pent-up demand documented at the end of 2025. Mortgage affordability triggered the fourth strongest number of sales in the month of February for a decade. This is despite fewer buyers being active in the market.
February analysis also revealed buyer numbers are set to improve. The deciding factor? Zoopla’s conclusion that 40% of homes for sale are now cheaper to buy with a mortgage than rent.
Home buying aspiration remains strong
Adding weight to this forecast is a key finding within the latest Pepper Money Specialist Lending Study. It found more than 85% of Gen Zs hope to own a property at some point in their lives. Gen Z are currently aged between 14 and 29 years old, with the upper bracket in prime first-time buyer territory.
So, what should buyers expect to pay for a property? Zoopla says the UK’s average house price is currently £269,900. Is this indicative of rising prices? Yes, this value is 1.3% more than a year ago but in practice, the UK’s average house price increased by just £100 between December 2025 and January 2026.
Rents fall for the second consecutive month
The value of UK rents continues to be a hot topic. The latest figures from HomeLet reveal tenants starting new agreements in January 2026 paid less than in December 2025. The average rent is now £1,302 per month – 1.2% lower than the last monitoring period.
HomeLet’s regional breakdown provided a fascinating snapshot. Rent values fell in all but two of the UK’s regions. Month-on-month rent values actually increased 0.6% in the South East and they stayed the same in the North West. Values decreased the most in London (-2.4%) and in the East Midlands (-1.6%).
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