House prices are expected to see gradual growth in the upcoming year following a recent stall, according to 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 high of £299,899, almost hitting the £300,000 milestone.
Economists attribute this sluggish growth to pre-Budget uncertainties, leading to a subdued market appetite. However, with the possibility of an imminent Bank of England rate cut, analysts anticipate a rebound in price growth early in 2026.
While national prices remained stable, regional disparities were pronounced, with notable variations in performance. For instance, Northern Ireland saw an impressive 9% annual increase in average property prices to £220,716, driven by a significant supply-demand imbalance. Conversely, Greater London continued to face challenges, with average prices declining by 1% to £539,766 last month.
The UK witnessed a sharp deceleration in annual price growth from 1.9% to 0.7% in the past month. Amanda Bryden, Halifax’s head of mortgages, noted that this slowdown, the weakest since March 2024, is primarily due to the base effect of robust price growth a year earlier.
Bryden highlighted that despite recent uncertainties like changes in stamp duty and Budget concerns, property values have remained resilient. The slower growth, while potentially disappointing for some homeowners, bodes well for first-time buyers, as affordability relative to average incomes is currently at its strongest since late 2015.
Looking ahead, Bryden expects property prices to continue a gradual upward trajectory into 2026, buoyed by stable market activity and anticipated interest rate reductions.
In November, Scotland registered a 3.7% annual growth in house prices, with the average property value standing at £216,781. Wales saw a 1.9% year-on-year increase, reaching an average value of £229,430, while England’s North West recorded the highest annual growth rate of 3.2%, with property prices averaging £245,070. Despite its decline, London remains the priciest region in the UK.
Industry experts, such as Jason Tebb from OnTheMarket and Iain McKenzie from The Guild of Property Professionals, highlighted the divergent regional trends and the impact of increased housing supply on market dynamics. Karen Noye of Quilter emphasized the importance of affordability amid evolving economic conditions, noting that mortgage pricing remains sensitive to various factors.
Sarah Coles, from Hargreaves Lansdown, echoed sentiments of a sluggish property market, emphasizing the influence of uncertainty on buyer behavior. However, she expressed optimism for a potential improvement in the near future, citing expected rate cuts and falling mortgage rates as possible market catalysts.