House prices in the UK increased in February, avoiding a repeat of the “negative speculation” that depressed the market before last November’s budget, as Rachel Reeves prepares to present the spring forecast on Tuesday.

The average price of a home rose to £273,176 last month, up by 0.3% from the month before, according to Nationwide, the UK’s biggest building society. It matched January’s monthly increase, and was above analysts’ forecasts of a 0.2% gain. The annual growth rate remained steady at 1%.

The chancellor’s imminent forecast has not led to a slowdown in the housing market, as speculation around property tax changes in the months leading up to last November’s budget did.

Jason Tebb, the president of the property website OnTheMarket, said: “Housing market activity and sentiment have continued to pick up this year, with buyers and sellers proceeding with their moves with more clarity and confidence, particularly as the spring forecast has not attracted anything like the same level of negative speculation as November’s budget.”

Reeves will seek to project calm and competence after a tumultuous 18 months, following the latest forecasts from the independent Office for Budget Responsibility on Tuesday. In a short statement to parliament, the chancellor is expected to highlight progress on reducing the cost of living and say Labour has the “right plan” for fixing the economy.

Robert Gardner, the Nationwide chief economist, said the latest house price figures pointed to a “a modest recovery after a dip at the end of 2025” driven by uncertainty around potential property tax changes before the budget. “Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained as expected.”

Housing market transactions climbed 10% last year compared with 2024. Gardner said improved affordability and an easing in mortgage availability “has helped to support first-time buyer activity”. First-time buyers are expected to drive sales this year.

UK inflation had been expected to ease to the Bank of England’s 2% target by April, allowing it to deliver another interest rate cut in the face of rising unemployment, sluggish economic growth and slowing wage rises.

However, the odds of a rate cut in March dropped to 71% on Monday morning, from 80% last week, after US-Israeli airstrikes on Iran drove oil prices sharply higher because of fears of oil supply disruption. Brent crude, the global benchmark, jumped as much as 13% in early trading and hit $82 a barrel.

Alice Haine, a personal finance analyst at Bestinvest, said higher energy prices would make it harder for the Bank to bring inflation down to target. She said many borrowers on one of the 1.8m fixed-rate mortgages expiring this year were rolling off ultra-low five-year fixed-rate deals into a much higher mortgage rate environment.

“They face refinancing at much higher rates than their current deal, which will put pressure on disposable incomes, though they can take comfort that they have avoided the worst of the mortgage crisis.”

The number of new mortgages approved declined to 59,999 in January, the lowest in two years, the Bank of England reported on Monday.

That slowdown came despite a drop in the “effective” interest rate on new mortgages, which fell to 4.09% in January from 4.15% in December.

Net borrowing of mortgage debt by individuals dropped to £4.1bn in January, from £4.5bn in December.