House prices are expected to see slow growth in the upcoming year following a recent stagnation, according to experts. Data from the Halifax mortgage lender reveals that average property prices showed minimal increase in November, edging up by £138 to reach a new high of £299,891, nearing the £300,000 milestone.
Economists attribute the sluggish growth to pre-Budget uncertainties, but anticipate a potential boost in price growth early next year with the possibility of another Bank of England rate cut. While national prices remained stable, some regions outperformed others. Notably, Northern Ireland saw a significant 9% year-on-year surge in average property prices to £220,716, driven by a supply-demand imbalance highlighted in a Danske Bank report.
Conversely, Greater London continues to face challenges, experiencing a 1% decline in average prices to £539,766 last month. The UK witnessed a sharp slowdown in annual price growth from 1.9% to 0.7%, marking the weakest growth since March 2024, largely due to a base effect from the previous year’s robust growth.
Amanda Bryden, head of mortgages at the Halifax, noted that despite slower growth, the stability in property values is positive for first-time buyers, as affordability has improved compared to previous years. Looking ahead, the expectation of further interest rate cuts and steady market activity may lead to gradual price increases through 2026.
In November, Scotland recorded a 3.7% annual house price growth, with the average property value standing at £216,781. Wales saw a 1.9% year-on-year rise to reach an average value of £229,430, while the North West of England had the highest annual price growth rate at 3.2%, with average prices reaching £245,070. Despite the decline, London remains the priciest region in the UK.
Industry experts like Jason Tebb and Iain McKenzie emphasized regional variations in the housing market, with the north performing better than the south due to affordability issues. Karen Noye from wealth manager Quilter highlighted ongoing affordability challenges despite easing inflation and potential rate cuts, emphasizing the impact of global factors on mortgage pricing.
Sarah Coles, head of personal finance at Hargreaves Lansdown, pointed out the sluggish pace of house price growth and the influence of market uncertainties on buyer behavior. She expressed optimism for a potential market pickup in the new year, driven by factors such as anticipated rate cuts and falling mortgage rates, which could improve property affordability and stimulate market activity.