House prices are expected to experience a gradual increase next year following a recent slowdown, as per industry experts. Data from the Halifax, a prominent mortgage lender, reveals that the average property prices almost stagnated in November, edging up by a mere £138 to reach a new peak of £299,892, nearly reaching the £300,000 milestone.
Economists attribute this sluggish growth to apprehensions leading up to the Budget, which impacted buyer enthusiasm. However, with the possibility of a Bank of England rate cut in the near future, analysts anticipate a resurgence in price growth early in 2026.
While national prices remained relatively stable, certain regions outperformed others, according to the Halifax report. For instance, Northern Ireland witnessed a significant annual increase of almost 9%, with average property prices reaching £220,716, up from 7.9% in the previous month. This surge in prices is attributed to a shortage of housing supply compared to the high demand in the region.
Conversely, Greater London continues to face challenges, with average prices declining by 1% to £539,766 in the same period.
The overall annual price growth across the UK decelerated notably last month, dropping from 1.9% to 0.7%. Amanda Bryden, the head of mortgages at Halifax, noted that this was the weakest growth since March 2024, largely influenced by the strong price growth observed a year earlier.
Bryden emphasized that despite the changes in stamp duty and uncertainties surrounding the Budget, property values have remained steady. While the slower growth might disappoint existing homeowners, it is positive news for first-time buyers. Affordability, when compared to average incomes, is currently at its most favorable level since late 2015.
Looking ahead, with stable market activity and expectations of further interest rate cuts, experts predict a gradual increase in property prices throughout 2026.
In November, Scotland recorded a 3.7% annual growth in house prices, with the average property value standing at £216,781. Wales also experienced a rise of 1.9% year-on-year, reaching an average property value of £229,430. In England, the North West led in annual growth rates, with property prices increasing by 3.2% annually to £245,070. Despite the decline, London remains the most expensive region in the UK.
Jason Tebb, president of OnTheMarket, commended the housing market’s resilience in 2025, highlighting regional disparities in market performance. Iain McKenzie, chief executive of The Guild of Property Professionals, attributed current market conditions to an increased supply of homes compared to the previous year, offering buyers more options and contributing to the short-term stabilization of price growth.
Mortgage expert Karen Noye from Quilter emphasized that post-Budget clarity has given borrowers a clearer outlook for early 2026. She noted that while inflation has eased and a rate cut is anticipated, mortgage pricing remains sensitive to market fluctuations, affecting borrowing power.
Sarah Coles, head of personal finance at Hargreaves Lansdown, expressed that house prices have shown minimal movement lately, with a sluggish 0.7% increase over the year, lagging behind inflation. She suggested that upcoming rate cuts and falling mortgage rates could potentially invigorate the market in the new year.
The article also includes a breakdown of average house prices and annual changes across various regions, as reported by Halifax.