Halifax – Mortgage Strategy Housing market set for modest growth in 2026 after stable 12 months
Halifax has revealed that the UK property market performed broadly in line with expectations last year, with modest growth expected in 2026.
The latest figures show annual growth is limited at just 0.7%, the lowest since March 2024, with Halifax mortgage director Amanda Bryden highlighting “one of the most stable years for UK house prices in the past decade”.
The average house price has risen to a new high of £299,892, up £2,221 from £297,671 a year ago.
Figures from Halifax show the price of properties bought by first-time buyers rose by 1.1 per cent last year to an average of £236,836.
Northern Ireland’s annual property price inflation rate last year was +8.9%, the highest of any region or country in the UK, while Greater London saw the largest fall in average house prices at 1.0%.
In the past three years between 2022 and 2025, typical house prices in the UK have increased by 4.7%, or £13,565.
This compares with an increase of 21.7%, or an increase of £50,974, in the first three years from 2019 to 2022.
So far in 2025, home prices have fallen four times and risen seven times on a monthly basis.
Halifax found market activity was affected by stamp duty changes but overall remained close to pre-pandemic levels.
Brydon said: “The biggest talking point has been the change to stamp duty thresholds in the spring, which has resulted in a large number of buyers trying to complete transactions before the deadline.
“March was one of the busiest months ever for completed transactions, but this spike did not translate into significant price increases and activity levels soon returned to normal.”
While affordability challenges remain, buyer confidence is supported by easing mortgage rates and steady wage growth.
Real estate prices are expected to rise slightly by 1% to 3% in 2026.
However, the bank’s forecast uncertainty remains high given the broader economic backdrop.
“While affordability remains challenging, conditions have improved compared to recent years as wages have grown above inflation, interest rates have fallen, and mortgage lenders have expanded eligibility criteria,” Bryden explained.
“For those getting their first foot on the property ladder, monthly mortgage costs as a proportion of income are now at their lowest levels since 2022, with typical two-year first home buyer mortgage rates (90% LTV) down around 0.8 percentage points on last year.”
“The second half was dominated by speculation about possible tax increases in the Autumn Budget. While this briefly depressed market sentiment, prices and activity generally remained stable.”
“Looking ahead to 2026, we expect house prices to rise slightly, in the range of 1% to 3%.”
“While wage growth is expected to slow and unemployment is likely to rise, lower interest rates and easing inflation should help gradually increase homebuyers’ purchasing power.”
