The UK housing market has started the new year fairly well, with prices edging up after a small dip at the end of last year.
According to the latest data from Halifax, average house prices rose by 0.7% in January, following a 0.5% fall in December. This increase has pushed the average UK property price to £300,077.
On an annual basis, prices are now 1% higher than a year ago, up from 0.4% in December – a sign that the market is gradually regaining momentum.
While £300,000 sounds impressive, price growth over recent years has been relatively modest compared to the pandemic boom.
“The housing market entered 2026 on a steady footing,” says Amanda Bryden, Head of Mortgages at Halifax. “Broader economic conditions continue to provide some support. Wage growth has been outpacing property price inflation since 2022, steadily improving underlying affordability. That’s a positive trend for buyers, and the long-term health of the market.”
Over the past three years, UK house prices have risen by around 5.7% (roughly £16,000). Higher interest rates and affordability pressures have kept a lid on sharper increases.
That’s a very different picture from 2020 to 2023, when prices jumped by nearly 19%, driven by ultra-low mortgage rates and a rush for more space.
A clear north–south divide
Regional differences in house prices are becoming more noticeable. Northern areas of the UK continue to show stronger growth, with Northern Ireland leading the way.
Average prices there are up 5.9% year-on-year, sitting at just over £217,000. Scotland isn’t far behind, with annual growth of 5.4% and an average price of around £222,000.
In England, the strongest growth is also concentrated in the north. The North West has seen prices rise by 2.1%, while the North East is up 1.2%, with average prices remaining well below the national average.
By contrast, several southern regions – including London, the South East, the South West and Eastern England – have seen prices fall by more than 1% over the past year. These higher-priced areas tend to be more sensitive to borrowing costs and taxes, which can affect buyer confidence.
What does this mean for buyers and homeowners?
Overall, the housing market looks resilient rather than booming. Prices are edging up, mortgage rates are slowly easing, and affordability is improving – albeit gradually.
“We’re now seeing more mortgage deals below 4%,” says Bryden. “If inflation continues to ease, there should be further gradual reductions as the year goes on. All in all, we still think house prices are likely to edge up between 1% and 3% this year.”
If you’re thinking about buying, moving, or remortgaging this year, the right advice can make a real difference. Every situation is different, and understanding your options is key.
If you’d like to talk through what this means for you, we’re here to help. Call our mortgage advisors on 020 8652 5240