Many buyers and homeowners are wondering what the year ahead may hold. Halifax says house prices should rise modestly by up to 3% in 2026.
According to Halifax’s latest Housing Market Review, 2025 has been one of the most stable years for UK house prices in over a decade – and that steadiness could continue into 2026.
Over the past year, UK house prices rose by just 0.7%, taking the average property price to a new high of £299,892. While that headline figure may sound daunting, the slower pace of growth is actually encouraging news for buyers, particularly first-time buyers, as it suggests affordability pressures are easing slightly.
‘While affordability remains challenging, the picture has improved compared to recent years,’ says Amanda Bryden, Head of Mortgages at Halifax. ‘For those taking their first steps onto the property ladder, monthly mortgage costs as a share of income are now at their lowest level since 2022, with the rate on a typical two-year first-time buyer mortgage (90% loan to value) dropping by roughly 0.8 percentage points over the last year.’
What influenced the market in 2025?
One of the biggest factors this year was the change to stamp duty thresholds in the spring. This prompted a rush of buyers keen to complete before the deadline, making March one of the busiest months on record. However, once that surge passed, activity levels quickly returned to normal and didn’t lead to sharp price increases.
Despite ongoing challenges around affordability, buyer confidence has been supported by a few key trends:
- Mortgage rates have gradually fallen over the year
- Wages have continued to grow faster than inflation
- Some lenders have relaxed their criteria, helping more people access mortgages
Les Pick, MB Associates’ Sales & Operations Director, says: ‘The latest Halifax housing market update suggests a period of continued stability rather than sharp change, which is generally positive for both buyers and homeowners.
‘Modest house price growth, easing mortgage rates and improving affordability point to a more balanced market, although challenges and regional differences remain.’
Regional differences still matter
The national picture doesn’t tell the whole story. Northern Ireland saw the strongest annual price growth at 8.9%, while Greater London experienced a small annual fall of 1%.
Looking ahead to 2026
Halifax expects house prices to rise modestly in 2026, with growth forecast between 1% and 3%. While wage growth may slow and unemployment could edge higher, anticipated lower interest rates and easing inflation should help improve buyers’ purchasing power over time.
If you’re thinking about buying your first home, moving, or reviewing your mortgage next year, getting advice early on can make all the difference. Speaking to an experienced mortgage adviser can help you understand what you can afford, how much deposit you’ll need, and which options best suit your circumstances.
Adds Les: “As we look ahead to 2026, careful planning will be important, and seeking professional mortgage advice can help you understand your options and make informed decisions based on your individual circumstances.”
Call MB Associates on 020 8652 5240 for mortgage advice in Surrey (Cheam, Kingston, and Sutton).