House prices are expected to see gradual growth in the upcoming year following a temporary halt last month, according to experts. Data from 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 £299,899, closely approaching the £300,000 milestone.
Economists attribute this sluggish growth to pre-Budget uncertainties, affecting market enthusiasm. However, there is optimism for a potential Bank of England rate cut in the near future, which could stimulate price increases early in 2026.
While national prices remained stable, regional disparities were evident. Northern Ireland experienced a significant surge of almost 9% in year-on-year property prices to £220,716, reflecting a demand-supply imbalance. Conversely, Greater London continued to struggle, witnessing a 1% decrease in average prices to £539,766 last month.
The annual price growth rate in the UK decelerated notably from 1.9% to 0.7% in the previous month. Amanda Bryden, the head of mortgages at Halifax, noted that this was the weakest performance since March 2024, largely influenced by the stronger growth rates observed a year ago.
Bryden highlighted that the stability in property values amidst changes in stamp duty and pre-Budget uncertainties is favorable for first-time buyers. Affordability has improved compared to recent years, with mortgage costs representing the lowest proportion of income in about three years. Anticipating further interest rate cuts and sustained market activity, experts foresee gradual price growth continuing into 2026.
Scotland recorded a 3.7% annual increase in house prices in November, with the average property value at £216,781. In Wales, prices rose by 1.9% year-on-year to reach £229,430, while the North West of England exhibited the highest annual growth rate at 3.2%, with property prices averaging £245,070. Despite its decline, London remains the costliest region in the UK.
Industry experts, including Jason Tebb from OnTheMarket and Iain McKenzie from The Guild of Property Professionals, emphasized the regional variations in market performance and the increased housing supply affecting short-term price growth. Mortgage expert Karen Noye from Quilter highlighted affordability challenges despite easing inflation, anticipating potential rate cuts to support borrowing capacity.
Sarah Coles, head of personal finance at Hargreaves Lansdown, expressed caution about the sluggish property market, citing uncertainties and economic concerns impacting buyer decisions. However, she hinted at a possible improvement in the new year, supported by expected rate cuts and declining mortgage rates, potentially enhancing property affordability and market activity.