House prices are expected to show gradual growth in the upcoming year following a recent slowdown, as per industry experts. Data from the Halifax, a mortgage lender, indicates that average property prices experienced minimal growth in November, edging up by a mere £138 to reach a new high of £299,898, nearly touching the £300,000 milestone.
Economic analysts attribute this sluggish growth to pre-Budget uncertainties that dampened market enthusiasm. However, with the possibility of a Bank of England rate decrease in the near future, projections suggest a potential uptick in price growth early in 2026.
While national prices remained stable, regional disparities were evident. Notably, Northern Ireland saw a significant annual increase of almost 9% in average property prices, reaching £220,716, driven by a supply-demand imbalance. Conversely, Greater London continued to struggle, with prices dropping by 1% to an average of £539,766 last month.
The overall annual price growth in the UK decelerated notably, from 1.9% to 0.7% in the past month. Amanda Bryden, head of mortgages at the Halifax, highlighted that this slow growth trend, the weakest since March 2024, was influenced by the strong price growth observed the previous year.
Bryden pointed out that despite recent changes like the stamp duty adjustments and pre-Budget uncertainties, property values have remained steady. This stability, while possibly disappointing for some homeowners, bodes well for first-time buyers. Affordability metrics, compared to average incomes, are currently at their most favorable levels since late 2015.
Looking ahead, with stable market activity and anticipated interest rate reductions, the expectation is for property prices to continue a gradual growth trajectory into 2026. Scotland recorded a 3.7% annual house price increase in November, with the average property value standing at £216,781. In Wales, prices rose by 1.9% annually to reach £229,430, and the North West of England led in annual growth rate at 3.2%, with property prices averaging £245,070.
Industry professionals like Jason Tebb and Iain McKenzie noted the regional variations in the housing market performance, with differences more pronounced between the north and south of the country. Mortgage expert Karen Noye emphasized the ongoing challenges related to affordability and market uncertainties.
Sarah Coles, head of personal finance at Hargreaves Lansdown, highlighted the sluggish nature of the property market, citing factors like economic uncertainty and labor market conditions. However, a potential rate cut and declining mortgage rates could inject some momentum into the market in the new year.