The smaller rebound than the December fall in the Nationwide index “may reflect evidence that the supply of homes on the market is currently at its highest since the pandemic, which is probably dampening prices somewhat”, said Alex Kerr, economist at Capital Economics. He expects that despite the recent increase in the supply of homes on the market, the combination of looser lending standards, further falls in mortgage rates and decent wage growth will allow house prices to rise by 3.5 per cent in the year to Q4 2026.