House prices are expected to see moderate growth in the upcoming year following a recent slowdown, as per industry experts. Data from the Halifax, a mortgage lender, reveals that average property prices saw minimal movement in November, edging up by £138 to reach a new record high of £299,898, nearly touching the £300,000 milestone.
Economists attribute this sluggish growth to pre-Budget uncertainties, with the potential for a Bank of England rate cut in the near future likely to spur price increases in early 2026.
While national prices have stabilized, certain regions have outperformed others. Northern Ireland, for instance, witnessed a significant 9% year-on-year surge in average property prices to £220,716, reflecting a supply-demand imbalance exacerbated by dwindling housing availability. In contrast, Greater London continues to face challenges, with average prices dropping by 1% to around £539,766 last month.
The annual growth rate across the UK decelerated notably in the previous month, falling from 1.9% to 0.7%. According to Amanda Bryden, head of mortgages at the Halifax, this slowdown, the most pronounced since March 2024, is primarily a result of a high comparison base from the previous year’s robust price growth.
Bryden also noted that while slower growth might disappoint existing homeowners, it presents a positive outlook for first-time buyers, with affordability metrics currently at their most favorable levels since late 2015. With expectations of continued market stability and further interest rate reductions, property prices are anticipated to gradually appreciate into 2026.
Scotland recorded a 3.7% annual increase in house prices in November, with the average property value reaching £216,781. In Wales, prices rose by 1.9% year-on-year to an average of £229,430, while the North West of England saw the highest annual growth rate at 3.2%, with property values averaging £245,070. Despite its decline, London remains the priciest region in the UK.
Industry experts, including Jason Tebb of OnTheMarket and Iain McKenzie of The Guild of Property Professionals, emphasize the impact of market dynamics, highlighting increased housing stock as a key factor in moderating price growth and providing buyers with more options.
Karen Noye, a mortgage specialist at Quilter, points out that post-Budget clarity has improved borrowers’ outlook for early 2026, although affordability concerns persist due to inflationary pressures and global economic uncertainties affecting mortgage rates.
Sarah Coles, head of personal finance at Hargreaves Lansdown, anticipates a gradual property market recovery in the new year, driven by potential rate cuts and declining mortgage rates, which could bolster purchasing power and reinvigorate market activity.