House prices are forecasted to experience gradual growth in the upcoming year following a period of stagnation last month, as per experts. Data from mortgage provider the Halifax indicates that average property prices saw a minimal increase in November, edging up by just £138 to reach a new record high of £299,893, narrowly missing the £300,000 milestone.
Economists attribute this sluggish growth to pre-Budget uncertainties, affecting market sentiment. However, with the potential for a Bank of England rate cut as soon as this month, analysts anticipate a resurgence in price growth early in 2026.
While national house prices remained relatively stable, specific regions displayed varying performance levels. Notably, Northern Ireland witnessed a substantial year-on-year surge of almost 9% in average property prices, climbing to £220,716 from 7.9% in October. This surge is partly due to a housing supply shortage in the region, as highlighted in a report by Danske Bank earlier this year.
Conversely, Greater London continues to face challenges, with average prices dropping by 1% to £539,766 last month. The UK experienced a notable slowdown in annual price growth, decreasing from 1.9% to 0.7%. Amanda Bryden, the head of mortgages at the Halifax, noted that this dip was the most significant since March 2024, largely influenced by the previous year’s robust price growth.
Bryden emphasized that despite recent changes such as adjustments to stamp duty and uncertainties preceding the autumn Budget, property values have managed to remain steady. While this slower growth may disappoint existing homeowners, it presents an opportunity for first-time buyers, as affordability has improved, reaching its strongest level since late 2015 in relation to average incomes.
Looking ahead, Bryden anticipates a gradual increase in property prices throughout 2026, especially with stable market activity and the expectation of further interest rate reductions. Scotland recorded a 3.7% annual house price growth in November, with the average property value at £216,781. In Wales, property values rose by 1.9% year-on-year to reach £229,430, while the North West of England saw the highest annual growth rate at 3.2%, with average prices hitting £245,070 per property.
Jason Tebb, President of OnTheMarket, praised the housing market’s resilience in 2025, noting regional disparities in performance. Iain McKenzie, Chief Executive of The Guild of Property Professionals, highlighted the increased supply of homes compared to the previous year, which has contributed to tempering price growth in the short term.
Karen Noye, a mortgage expert at wealth manager Quilter, emphasized the lingering challenge of affordability post-Budget, with mortgage costs remaining sensitive to market shifts. Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, indicated a sluggish property market with a modest 0.7% average price increase over the year, attributing the stagnation to prevailing uncertainty and economic factors.
Coles expressed optimism for a potential market uptick in the new year, citing expectations of a Bank of England rate cut and declining mortgage rates. These factors, coupled with rising wages, may enhance property affordability and stimulate market activity.