House prices are expected to have a slow growth trajectory in the upcoming year following a recent stall, as per industry experts. Data from the Halifax, a mortgage lender, reveals that average property prices experienced minimal growth in November, edging up by £138 to reach a new record high of £299,890, almost touching the £300,000 threshold.
Economists attribute this sluggish growth to pre-Budget uncertainties, which impacted buyer confidence. However, with the potential for a Bank of England rate cut soon, analysts anticipate a resurgence in price growth by early 2026.
While national prices remained relatively stable, regional disparities were evident. For instance, Northern Ireland saw a significant annual increase of nearly 9% in average property prices, reaching £220,716, driven by a supply-demand imbalance highlighted by dwindling housing availability. Conversely, Greater London continues to struggle, with prices dipping by 1% to an average of £539,766 last month.
Across the UK, the annual price growth rate decelerated notably from 1.9% to 0.7% in the previous month. Amanda Bryden, head of mortgages at the Halifax, noted that this slowdown, the most pronounced since March 2024, was largely influenced by a base effect from robust price growth the previous year.
Bryden mentioned that despite the recent changes in stamp duty and uncertainty surrounding the Budget, property values have held steady. This slower growth may disappoint existing homeowners but offers a silver lining for first-time buyers, with affordability reaching its peak since late 2015. With current interest rates comparatively higher, mortgage costs as a proportion of income are at their lowest level in about three years, signaling a positive outlook for gradual price growth in 2026.
In November, Scotland recorded a robust annual house price growth of 3.7%, with the average property value at £216,781. Wales also experienced a rise of 1.9% in average property values, reaching £229,430 annually. In England, the North West led with the highest annual growth rate of 3.2%, with property prices averaging at £245,070. Despite the decline, London remains the priciest region in the UK.
Industry voices, such as Jason Tebb, president of OnTheMarket, and Iain McKenzie, chief executive of The Guild of Property Professionals, highlighted the impact of regional variations and increased housing supply on market dynamics. Mortgage expert Karen Noye from Quilter emphasized the importance of affordability and the potential influence of interest rate adjustments on mortgage costs.
Sarah Coles, head of personal finance at Hargreaves Lansdown, pointed out the lackluster performance of house prices in recent months, attributing it to market uncertainty and economic factors affecting buyer sentiment. Nevertheless, she expressed optimism for a potential market uptick in the coming months, backed by potential rate cuts and declining mortgage rates, which could enhance property affordability and stimulate market activity.
