House prices are expected to experience gradual growth in the upcoming year following a recent slowdown, as per experts’ projections. Data released by the Halifax, a mortgage lender, reveals that average property prices nearly stalled in November, edging up by only £138 to reach a new high of £299,898, inching close to the £300,000 milestone.
Economists attribute this sluggish growth to pre-Budget uncertainties, causing some hesitancy in the market. However, the anticipation of a potential Bank of England rate cut in the near term could spur price increases early in 2026.
Although national prices remained steady, regional disparities were evident with notable variations in performance. For instance, Northern Ireland saw a significant annual increase of almost 9% in average property prices, reaching £220,716, driven by a persistent supply-demand imbalance. Conversely, Greater London experienced a 1% decline in average prices, dropping to £539,766 last month.
The overall annual price growth rate across the UK decelerated sharply from 1.9% to 0.7% in the last month. Despite this slowdown, affordability has improved, particularly benefiting first-time buyers. Market experts predict a gradual uptrend in property prices heading into 2026, buoyed by stable market activity and potential future rate cuts.
In November, Scotland recorded a solid annual house price growth of 3.7%, with average property values standing at £216,781. Meanwhile, Wales witnessed a 1.9% year-on-year price increase, reaching an average of £229,430. In England, the North West outperformed other regions with a 3.2% annual price growth, reaching £245,070. Despite its price decline, London remains the most expensive property market in the UK.
Industry professionals emphasize the varying market conditions across regions, with higher supply levels compared to the previous year influencing price dynamics. The market’s resilience in 2025 has been notable, with regional disparities becoming more pronounced, favoring the north over the south due to affordability concerns.
Experts highlight that post-Budget clarity has provided borrowers with a clearer outlook for early 2026. Affordability remains a key challenge, influenced by inflation trends and potential rate cuts. While mortgage rates have decreased, the gradual progress may be insufficient to offset high living costs, particularly impacting first-time buyers.
Looking ahead, market observers anticipate a potential market revival in the new year, supported by potential rate cuts and falling mortgage rates. The expected wage growth outpacing inflation and house price increases could enhance affordability, potentially stimulating market activity in the coming months.
