House prices are expected to experience gradual growth in the upcoming year following a recent slowdown, as per expert predictions. Data from the Halifax, a mortgage lender, reveals that average property prices saw minimal growth in November, inching up by £138 to reach a new peak of £299,898, nearly reaching the £300,000 threshold.
Economists attribute this sluggish growth to pre-Budget uncertainties, which dampened market enthusiasm. However, with the likelihood of another Bank of England rate cut soon, experts anticipate a resurgence in price growth in early 2026.
While national prices remained stable, regional disparities were evident, with some areas outperforming others. Notably, Northern Ireland saw a significant annual increase of almost 9% in average property prices, reaching £220,716, driven by a supply-demand imbalance. Conversely, Greater London continued to struggle, with prices dropping by 1% to an average of £539,766 in the same period.
Overall, the annual price growth across the UK decelerated notably last month, dropping from 1.9% to 0.7%. Amanda Bryden, the head of mortgages at Halifax, noted that this was the weakest growth since March 2024, largely influenced by a higher base effect from the previous year’s robust growth.
Bryden highlighted that despite various market factors like changes in stamp duty and fiscal uncertainties, property values maintained stability. This steadier growth, though disappointing for some existing homeowners, presents a favorable scenario for first-time buyers, with affordability reaching its strongest level since late 2015.
Looking ahead, with sustained market activity and anticipated interest rate reductions, the consensus is that property prices will continue to rise gradually into 2026. Annual house price growth in Scotland stood at 3.7% in November, with the average property value at £216,781. In Wales, prices rose by 1.9% year-on-year to an average of £229,430, while the North West of England recorded the highest annual growth rate of 3.2%, with an average property price of £245,070.
Jason Tebb, president of OnTheMarket, emphasized the regional disparities in the housing market, with the north showing better performance compared to the pricier south. Iain McKenzie, chief executive of The Guild of Property Professionals, highlighted the increased supply of homes compared to the previous year, which is moderating price growth in the short term.
Karen Noye, a mortgage expert at Quilter, pointed out that post-Budget clarity has provided borrowers with a clearer outlook for early 2026. Affordability remains a key concern, with mortgage pricing sensitive to market shifts and global influences. Sarah Coles, head of personal finance at Hargreaves Lansdown, expressed a cautious outlook, noting the subdued property price growth and underlying uncertainties impacting the market.
In conclusion, while the housing market has shown resilience in 2025, the outlook for 2026 remains cautious yet hopeful, with potential factors like interest rate cuts and improving affordability expected to impact property dynamics moving forward.