House prices are expected to experience gradual growth in the upcoming year following a recent stagnation, as per experts. Data from the Halifax, a mortgage lender, indicates that average property prices showed minimal increase in November, edging up by £138 to reach a new peak of £299,891, nearly touching the £300,000 milestone.
Economists attribute this sluggish growth to pre-Budget uncertainties, causing a hesitancy among buyers. However, with the potential for another Bank of England rate cut as early as this month, experts foresee a resurgence in price growth at the start of 2026.
While national prices remained steady, certain regions saw notable improvements. For instance, Northern Ireland witnessed a substantial year-on-year surge of almost 9%, reaching £220,716, up from 7.9% in October. The region, with a population exceeding 1.9 million, faces a significant housing demand-supply gap. Conversely, Greater London continues to struggle, with prices declining by 1% to an average of £539,766 in the past month.
Across the UK, the annual price growth rate decelerated significantly last month, dropping from 1.9% to 0.7%. Amanda Bryden, the head of mortgages at Halifax, noted that this slowdown, the weakest since March 2024, is mainly due to the base effect of robust price growth in the previous year.
Bryden further explained, “Despite stamp duty adjustments earlier this year and uncertainties before the autumn Budget, property values have remained stable. While slower growth might disappoint some current homeowners, it presents a favorable scenario for first-time buyers. Comparing property prices to average incomes, affordability is now at its highest level since late 2015.”
She added, “Considering the current higher interest rates, mortgage costs relative to income are at their lowest point in about three years. Looking forward, with steady market activity and expectations of further interest rate reductions, we anticipate a gradual increase in property prices through 2026.”
In November, Scotland recorded an annual house price growth of 3.7%, with the average property value standing at £216,781. In Wales, property values rose by 1.9% year-on-year, reaching £229,430. Meanwhile, in England, the North West saw the highest annual growth rate, with property prices increasing by 3.2% annually to £245,070. Despite the decline, London remains the costliest part of the UK.
Jason Tebb, president of OnTheMarket, emphasized the housing market’s significant resilience in 2025, highlighting regional disparities and stronger performance in the north compared to the pricier south, where affordability poses a greater challenge.
Iain McKenzie, chief executive of The Guild of Property Professionals, pointed out that the increased supply of homes compared to the previous year is influencing market conditions, providing buyers with more options and tempering short-term price growth.
Karen Noye, a mortgage expert at wealth manager Quilter, discussed the post-Budget environment, highlighting affordability challenges despite easing inflation and potential rate cuts. She emphasized that while fixed mortgage rates have decreased, progress remains gradual, and high living costs constrain borrowing capacity, especially for first-time buyers.
Sarah Coles, head of personal finance at Hargreaves Lansdown, expressed that the housing market has been stagnant, with modest price growth in 2025. She mentioned the impact of uncertainty on buyer behavior and speculated on a potential market improvement in the new year, driven by expected rate cuts and falling mortgage rates amid rising wages.
The article also includes details on average house prices and annual changes across different regions, sourced from Halifax data.