House prices are expected to see moderate growth in the upcoming year following a recent slowdown, according to experts. Data from the Halifax, a mortgage lender, reveals that average property prices saw minimal increase in November, edging up by £138 to reach a new high of £299,892, approaching the £300,000 mark.
Economists attribute this sluggish growth to apprehension surrounding the Budget, yet they anticipate a potential Bank of England rate cut in the near future could stimulate price acceleration early in 2026.
While national prices remained stable, certain regions outperformed others. For instance, Northern Ireland experienced a significant surge of nearly 9% in average property prices year-on-year, reaching £220,716, up from 7.9% in October. The region, with a population exceeding 1.9 million, faces a housing shortage exacerbated by dwindling supply, as indicated by a Danske Bank report citing the lowest level of planning applications since 2002.
Conversely, Greater London continues to struggle, with average prices decreasing by 1% to £539,766 last month. The UK witnessed a notable deceleration in annual price growth from 1.9% to 0.7% in November. Amanda Bryden, the head of mortgages at Halifax, noted that this dip, the most significant since March 2024, is largely influenced by the base effect of stronger price growth during the same period last year.
Bryden further remarked that while slower growth might disappoint some homeowners, it presents an opportunity for first-time buyers. Property affordability, in relation to average incomes, is currently at its most favorable level since late 2015. With prevailing higher interest rates, mortgage costs relative to income are at their lowest in around three years. Looking ahead, Bryden anticipates gradual property price growth continuing into 2026.
In November, Scotland saw annual house price growth of 3.7%, with average property values standing at £216,781. Wales experienced a 1.9% year-on-year increase, reaching an average value of £229,430. The North West of England recorded the highest annual growth rate at 3.2%, with property prices averaging £245,070. Despite the decline, London remains the costliest region in the UK.
Jason Tebb, president of OnTheMarket, commended the housing market’s resilience in 2025, underscoring regional disparities with stronger performance in the north compared to the pricier south, where affordability poses a greater challenge.
Iain McKenzie, chief executive of The Guild of Property Professionals, highlighted the increased housing supply compared to the previous year, providing buyers with more options and moderating price growth in the short term.
Karen Noye, a mortgage expert at Quilter, emphasized the lingering challenge of affordability post-Budget, citing influences such as inflation, potential interest rate cuts, and global economic conditions affecting mortgage pricing and borrowing capacity.
Sarah Coles, head of personal finance at Hargreaves Lansdown, pointed out the sluggish pace of house price growth in November, attributing it to uncertainties like pre-Budget concerns and labor market weaknesses. Coles expressed optimism for a potential market uplift in the upcoming year with expected rate cuts and declining mortgage rates aligning with rising wages.
The Halifax data indicates the average house prices and annual changes across regions, reflecting the most recent three months of approved mortgage transactions.