House prices are expected to experience gradual growth in the upcoming year following a stagnation period in the previous month, as per industry experts.
Data released by the Halifax, a prominent mortgage lender, reveals that average property prices showed minimal growth in November, edging up by £138 to reach a new record high of £299,898 but narrowly missing the £300,000 milestone.
Economists attribute this sluggish growth to apprehensions surrounding the upcoming Budget. However, with the potential for a Bank of England rate cut in the near future, analysts anticipate a resurgence in price growth early in 2026.
While national house prices remained relatively stable, certain regions outperformed others. In Northern Ireland, for instance, average property prices surged by nearly 9% year-on-year to £220,716, compared to 7.9% in October. The region, with a population exceeding 1.9 million, is facing a shortage of housing supply, with planning applications hitting a low not seen since 2002, according to a report by Danske Bank.
Conversely, Greater London continues to struggle, with average prices dropping by 1% to around £539,766 last month.
The annual rate of price growth across the UK significantly decelerated last month, declining from 1.9% to 0.7%. Amanda Bryden, the head of mortgages at the Halifax, noted that this was the weakest growth rate since March 2024, largely attributable to the robust price growth experienced during the same period last year.
Bryden added that despite adjustments to stamp duty earlier in the year and uncertainties preceding the autumn Budget, property values remained steady. This slower growth may disappoint existing homeowners but is positive news for first-time buyers. Affordability, when compared to average incomes, is currently at its strongest level since late 2015.
Looking ahead, with stable market activity and expectations of further interest rate reductions, experts anticipate a gradual increase in property prices through 2026.
In November, Scotland recorded an annual house price growth of 3.7%, with the average property value reaching £216,781. Meanwhile, in Wales, average property values rose by 1.9% year-on-year to reach £229,430. The North West of England led in annual growth rate, with property prices rising by 3.2% to £245,070. Despite the decline, London remains the priciest region in the UK.
Jason Tebb, president of OnTheMarket, commended the housing market for its resilience in 2025, highlighting the notable regional variations in market performance. He pointed out that the northern regions outperformed the costlier south due to affordability concerns.
Iain McKenzie, chief executive of The Guild of Property Professionals, emphasized the increased supply of homes compared to the previous year as a key factor influencing current market conditions. The surplus in supply is helping to control price growth in the short term.
Karen Noye, a mortgage expert at wealth manager Quilter, indicated that post-Budget uncertainties have somewhat cleared, offering borrowers a clearer outlook for early 2026. Affordability remains a challenge, with mortgage pricing sensitive to shifts in swap rates and global economic pressures.
Sarah Coles, head of personal finance at Hargreaves Lansdown, highlighted the sluggish nature of house price movements, noting a modest 0.7% increase over the year so far, lagging behind inflation. Coles suggested that a potential rate cut and declining mortgage rates could inject some momentum into the market in the new year.