House prices are expected to see gradual growth in the upcoming year following a recent slowdown, as per experts. The latest data from the Halifax reveals that average property prices almost plateaued in November, inching up by a modest £138 to reach a new high of £299,898, flirting with the £300,000 mark.
Economists attribute this sluggish growth to pre-Budget uncertainties, which dampened market enthusiasm. However, with the likelihood of a Bank of England rate cut in the near future, analysts anticipate a rebound in price growth in early 2026.
While national house prices remained steady, regional variations were notable. Northern Ireland witnessed a substantial 9% yearly surge in property values, reaching £220,716, driven by a significant supply-demand gap. In contrast, Greater London struggled with a 1% decline, settling at an average price of £539,766 last month.
The UK experienced a sharp deceleration in annual price growth from 1.9% to 0.7% recently. Amanda Bryden, head of mortgages at the Halifax, noted that this was the weakest growth since March 2024, largely attributable to the stronger growth seen a year ago.
Bryden highlighted that despite the market’s stability post-stamp duty changes and pre-Budget uncertainties, the current slower growth benefits first-time buyers. Affordability, relative to average incomes, is at its best since late 2015, aided by higher interest rates and reduced mortgage costs. Looking ahead, with expected interest rate cuts and steady market activity, property prices are projected to continue their gradual ascent into 2026.
Annual house price growth in Scotland stood at 3.7% in November, with an average property value of £216,781. Wales saw a 1.9% increase, reaching £229,430, while the North West of England recorded the highest annual growth rate at 3.2%, with average prices hitting £245,070. Despite its price dip, London remains the priciest region in the UK.
Industry experts like Jason Tebb and Iain McKenzie acknowledged the varying regional market performances, emphasizing the surplus in housing supply tempering short-term price hikes. Mortgage expert Karen Noye highlighted lingering affordability challenges despite easing inflation and potential rate cuts. Sarah Coles from Hargreaves Lansdown expressed cautious optimism for a modest market pickup in the coming months, buoyed by potential rate cuts and falling mortgage rates.