Halifax’s latest House Price Index has shown that average UK house prices fell by 0.6% in December, the lowest for six months.
The average house price now stands at £297,755, down £1,789 from November. Annual house price growth also slowed to 0.3%, down from 0.6% in November.
However, despite the decline, Amanda Bryden, head of mortgages at Halifax, said: “While this may feel like a subdued close to the housing market in 2025, overall activity levels were resilient over the last year and broadly in line with the pre-pandemic average.”
“Various forces are poised to somewhat buoy the market heading into 2026. While December’s monthly fall in prices was likely related to uncertainty in the latter part of the year, this should now be starting to unwind. Further, mortgage rates are already reducing following the latest Base Rate cut and there are an increasing number of lending options available for those borrowing at a higher loan-to-value.”
On a regional level, Northern Ireland remained the strongest performing, with average property prices rising 7.5% year-on-year. Scotland also saw strong growth, up 3.9% annually, while the North East had the highest annual growth rate in England, rising 3.5%.
It was a different story for London however, with Halifax reporting an annual decline of 1.3% and the average house price now standing at £539,086.
Amanda Bryden continued: “While affordability pressures persist, the house price to income ratio was at its lowest in over a decade in December, striking a positive note for those looking to purchase their first home.”
“On this basis, and recognising the headwinds that may affect buying power – such as the slowing of wage inflation and flattening employment rates – we expect a modest rise in house prices during the year of between 1% and 3%.”
Jason Tebb, president of OnTheMarket, commented: “While affordability concerns and increased stock levels keep property prices in check to an extent, nevertheless the housing market continues to demonstrate considerable resilience. Although speculation as to what the Budget might hold created uncertainty with some pausing and putting moving plans on hold, there are signs that buyers and sellers are putting this behind them.”
“Falling interest rates have significantly boosted confidence. Six rate cuts in the past 17 months, with more expected this year as inflation appears to have peaked, are easing affordability and giving comfort to those planning a move. As lenders tweaked their mortgage rates downwards towards the end of last year and continue to do so at the start of this one, this will provide further impetus and encourage activity.”
