House prices are expected to see gradual growth in the upcoming year following a recent slowdown, according to experts. Data from mortgage provider the Halifax reveals that average property prices saw minimal increase in November, edging up by £138 to reach a new peak of £299,890, coming close to the £300,000 milestone.
Economists attribute the sluggish performance to pre-Budget uncertainties, but they anticipate a potential Bank of England rate cut in the near future, which could spur price growth early in 2026.
While national prices have largely stabilized, certain regions have outperformed others. For instance, Northern Ireland witnessed a significant 9% year-on-year surge in average property prices to £220,716, up from 7.9% in October. The region, with a population exceeding 1.9 million, faces a housing supply shortage, as noted in a Danske Bank report highlighting the lowest level of planning applications since 2002.
Conversely, Greater London continues to struggle, experiencing a 1% decline in average prices to £539,766 last month.
On a broader scale, the annual price growth rate across the UK slowed notably from 1.9% to 0.7% in the previous month. Amanda Bryden, head of mortgages at the Halifax, mentioned that this deceleration is the most subdued since March 2024, primarily due to the base effect of robust price growth a year earlier.
Bryden also stated, “Despite stamp duty adjustments and pre-Budget uncertainties, property values have remained steady. While slower growth may disappoint some current homeowners, it bodes well for first-time buyers. Affordability, in terms of property prices compared to average incomes, is currently at its strongest since late 2015.”
She added, “Taking into consideration the current higher interest rates, mortgage affordability is at its best level in around three years. Looking ahead, with stable market activity and expectations of further interest rate cuts, we anticipate a gradual increase in property prices throughout 2026.”
Notable annual house price growth of 3.7% was observed in Scotland in November, with the average property value standing at £216,781. Meanwhile, in Wales, average property values rose by 1.9% year-on-year to reach £229,430. The North West of England registered the highest annual growth rate at 3.2%, with property prices averaging £245,070. Despite its decline, London remains the most expensive region in the UK.
Jason Tebb, president of OnTheMarket, commended the housing market’s resilience in 2025, emphasizing regional disparities where the northern market outperformed the pricier south due to affordability challenges.
Iain McKenzie, chief executive of The Guild of Property Professionals, highlighted an increased supply of homes compared to the previous year, providing buyers with more options and moderating short-term price growth.
Karen Noye, a mortgage expert at Quilter, emphasized the lingering challenge of affordability post-Budget, noting that while inflation has eased and a rate cut is anticipated, mortgage rates are influenced by swap rates and global factors. She pointed out that fixed rates have decreased, yet high living costs continue to limit borrowing capacity, especially for first-time buyers.
Sarah Coles, head of personal finance at Hargreaves Lansdown, echoed the sentiment of sluggish house price growth, attributing it to market uncertainties and labor market weaknesses. However, she expressed optimism for a potential uptick in the new year, citing possible rate cuts and falling mortgage rates alongside rising wages, which could enhance property affordability and stimulate market activity.