House prices are projected to experience gradual growth in the upcoming year following a recent pause, as per experts. Data from the Halifax, a mortgage lender, indicates that average property prices nearly stagnated in November, edging up by only £138 to reach a new peak of £299,891, nearing the £300,000 threshold.
Economists attribute this sluggish growth to pre-Budget uncertainties, but with the possibility of a Bank of England rate cut in the near future, they anticipate a potential uptick in price growth by early 2026.
While national prices remained stable, certain regions outperformed others. For instance, Northern Ireland saw a significant annual increase of nearly 9% in average property prices, reaching £220,716, up from 7.9% in October. Conversely, Greater London continues to face challenges, with average prices declining by 1% to £539,766 last month.
Overall, the UK witnessed a notable deceleration in annual price growth from 1.9% to 0.7% in the past month. Amanda Bryden, the head of mortgages at the Halifax, noted that this slowdown is the most pronounced since March 2024, primarily due to the stronger price growth seen a year earlier.
Bryden added that despite recent changes in stamp duty and uncertainties surrounding the autumn Budget, property values have remained steady. While slower growth might disappoint existing homeowners, it is positive news for first-time buyers. Affordability, compared to average incomes, is currently the strongest it has been since late 2015.
Looking ahead, with stable market activity and expectations of further interest rate cuts, experts anticipate a gradual increase in property prices throughout 2026. Annual house price growth in Scotland stood at 3.7% in November, with the average property value at £216,781. Wales also saw a rise of 1.9% year-on-year, reaching an average value of £229,430.
In England, the North West reported the highest annual growth rate, with property prices increasing by 3.2% annually to £245,070. Despite the decline, London remains the most expensive part of the UK.
Jason Tebb, the president of OnTheMarket, highlighted the varying regional performances within the housing market, noting a stronger market in the north compared to the costlier south. Iain McKenzie, the chief executive of The Guild of Property Professionals, pointed out that the increased supply of homes compared to the previous year is moderating price growth in the short term.
Karen Noye, a mortgage expert at wealth manager Quilter, emphasized that post-Budget clarity has provided borrowers with a clearer outlook for early 2026. Affordability remains a key obstacle, influenced by factors such as inflation, impending interest rate cuts, and mortgage pricing sensitivity to global economic conditions.
Sarah Coles, head of personal finance at Hargreaves Lansdown, expressed that house prices have been relatively stagnant, with only a 0.7% increase over the year, lagging behind inflation. She mentioned that upcoming events like a potential rate cut could inject some momentum into the market, especially with falling mortgage rates and rising wages potentially improving affordability.
