House prices are expected to see gradual growth in the upcoming year following a recent slowdown, according to experts. The latest data from mortgage provider Halifax reveals that average property prices nearly stalled in November, edging up by a modest £138 to reach a record high of £299,895, inching closer to the £300,000 milestone.
Economists attribute this sluggish growth to pre-Budget uncertainties, which tempered buyer interest. However, with the possibility of a Bank of England rate reduction in the near future, analysts anticipate a resurgence in price appreciation at the beginning of 2026.
While national house prices experienced minimal fluctuations, regional disparities were notable. Northern Ireland witnessed a robust surge of almost 9% in average property values year-on-year, climbing to £220,716 from October’s 7.9%. The region, with a population exceeding 1.9 million, faces a housing supply deficit exacerbating demand. A report by Danske Bank earlier this year highlighted a significant drop in planning applications in Northern Ireland to levels not seen since 2002.
Conversely, Greater London continues to struggle, with average prices declining by 1% to a typical value of £539,766 last month. Across the UK, the annual rate of price growth decelerated sharply in the previous month 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 comparison to the significantly stronger growth recorded during the same period the previous year.
Bryden emphasized that despite recent changes in stamp duty and uncertainty surrounding the autumn Budget, property values have held steady. While slower growth might disappoint current homeowners, it presents a favorable scenario for first-time buyers. Affordability, in terms of property prices relative to average incomes, is at its most favorable level since late 2015, aided by the current higher interest rates which have reduced mortgage costs as a percentage of income to a three-year low.
Looking ahead, with stable market activity and expectations of further interest rate adjustments, Halifax predicts a gradual increase in property prices throughout 2026. Notably, Scotland recorded an annual house price growth of 3.7% in November, with the average property value reaching £216,781. In Wales, average property values rose by 1.9% year-on-year to stand at £229,430. The North West region in England reported the highest annual growth rate of 3.2%, with property prices averaging £245,070 annually, while London remains the costliest part of the UK.
Jason Tebb, president of OnTheMarket, praised the housing market’s resilience in 2025, noting significant regional variations, with stronger performance in the north compared to the pricier south where affordability remains a concern. Iain McKenzie, chief executive of The Guild of Property Professionals, attributed the current market conditions to increased housing supply, which has provided buyers with more options, thus moderating short-term price growth.
Karen Noye, a mortgage expert at wealth manager Quilter, highlighted affordability as a key challenge post-Budget, citing the impact of inflation, interest rates, and global economic factors on mortgage pricing. Sarah Coles, head of personal finance at Hargreaves Lansdown, echoed the sentiment of a sluggish market in November due to prevailing uncertainties but expressed optimism for a potential uptick in the new year, buoyed by anticipated rate cuts and declining mortgage rates.