According to data from mortgage lender Halifax, UK house prices rose just 0.3% year-on-year in December, marking the slowest annual increase since March 2024.
On a monthly basis, prices unexpectedly fell 0.6% in December, following a 0.1% decline in November. Economists surveyed by Reuters had anticipated a 1.1% annual increase and a 0.2% monthly rise, underscoring the pronounced slowdown at the end of the year.
Amanda Bryden, Head of Mortgages at Halifax, attributed the monthly decline to heightened seasonal uncertainty, while noting that these pressures are expected to ease gradually. She added that the combination of lower mortgage rates and modest price growth has improved affordability for first-time buyers, with the house price-to-income ratio falling to its lowest level in a decade.
By contrast, Matt Swannell, Chief Economic Adviser at the EY Item Club, offered a more cautious assessment, arguing that affordability conditions are unlikely to improve significantly. He highlighted that easing in the labor market is expected to slow wage growth, while opportunities for further substantial reductions in mortgage rates in 2026 are limited. “It is very likely that rates will decline less this year than they did last year,” he remarked.
The Bank of England lowered its base rate to 3.75% in December from 4%, with markets pricing in one or two further 25-basis-point cuts over the course of 2026.
Halifax’s findings are broadly consistent with data from Nationwide, which reported a 0.4% monthly fall in December and the slowest annual growth since April 2024.
Despite the short-term slowdown, Halifax expects UK house prices to rise by 1%–3% in 2026. A Reuters survey of property market experts projects a 2.8% increase, accelerating from 2% growth in 2025.
At the regional level, conditions remain uneven. London saw prices decline 1.3% year-on-year, while Northern Ireland recorded the strongest increase, with prices rising 7.5%, according to Halifax.
