Steady growth, easing rates and renewed buyer confidence set the stage for 2026
The average UK house price rose by 2.5% to £271,000 in the year to November 2025, according to the latest figures from the Office for National Statistics (ONS). That marked an acceleration from 1.9% annual growth in the 12 months to October 2025.
By nation, average prices in the year to November climbed to £293,000 in England (up 2.2%), £209,000 in Wales (up 0.7 percentage points), and £193,000 in Scotland (up 4.5%).
Rents also continued to rise, with average UK monthly private rents increasing by 4% in the 12 months to December 2025.
Regionally, the North East recorded the strongest house price inflation in England, with prices up 6.8% in the 12 months to November, compared with 5.2% in the year to October. London remained the underperformer, with prices falling by 1.2% in the year to November, albeit a smaller drop than the 2.6% decline recorded in the 12 months to October.
Adrian Moloney, group lending distribution director at OSB Group, said headline figures concealed the ongoing affordability pressures facing many borrowers, while also pointing to a potential shift later this year:
“Today’s data from ONS shows that as expected, house price growth remains steady but slow. Yet the reality for many buyers is that getting onto or up the housing ladder remains a challenge.
“There is a genuine opportunity for an affordability turning point in 2026, if lower inflation and reduced funding costs continue to feed into sharper pricing and more flexible products.
“In that environment, brokers and lenders will be central to helping borrowers make the numbers work month to month and in ensuring that any improvement in affordability translates into people being able to buy or move.”
Chris Storey, chief commercial officer at Atom bank, said the modest rise in values at the end of last year reflected a more settled backdrop heading into 2026:
“The small uptick in house prices reflect the stability of the market at the tailend of last year, particularly as the caution and uncertainty surrounding the Budget eased. While we are very much in the early days of 2026, the ingredients are there for more growth in the year ahead, with Rightmove having reported asking prices have seen their largest January jump on record. Vendors are coming to the market, and feeling more confident about their prospects not just of achieving a sale, but getting a good price in the process.
“There is obvious demand from buyers, too. Rightmove reported its busiest ever Boxing Day, a useful barometer for the pent-up interest from those deciding whether to push forward with a move in the New Year, while the cost of those transactions are looking more appealing off the back of another Base Rate cut. As Moneyfacts put it, this year looks to be a “booming” one for the mortgage market, given mortgage choice has grown to its strongest level in 18 months, while rates look set to improve still further.
“That appetite needs to be matched with supply, however. Analysis shows the number of homes coming to market have reached a 12-year high, which is encouraging, but we desperately need to see new homes being produced at a faster rate. Recent analysis from S&P Global and Cips suggests housebuilding is in its biggest slump since the early days of the pandemic, and unless we see that situation improve substantially, there will be sustained upward pressure on house prices. New build properties will always appeal to buyers, given the lack of baggage that comes with them, and already command a premium. That premium is only going to become more significant if production doesn’t improve, risking freezing out whole swathes of buyers from the new-build market.”
Jason Tebb, president of OnTheMarket, highlighted both the headline resilience and the regional divergence in values:
“Property values continued to rise on an annual basis in November, with the average price £6,000 higher than a year ago. In the run up to the delayed Autumn Budget, caution and price sensitivity prevailed as some would-be movers paused amid concern about potential property tax changes.
“However, since the Budget, our own property sentiment report reveals that over half of sellers and renters across the country are pressing ahead and even accelerating their plans, a positive sign for market activity this year.
“The average UK house price conceals notable regional differences, with values in London contracting on a yearly basis. Increased supply, low buyer demand and stretched affordability in the capital where values can be significantly higher than elsewhere in the country are all playing their part, along with higher living costs.
“With inflation rising to 3.4 per cent in the year to December, there will be concerns that this will slow the pace of future Bank of England base rate reductions. Six base-rate cuts in the past 18 months have had a huge impact on the market, boosting buyer and seller confidence and activity, although affordability remains a challenge.”
North London estate agent and former RICS residential chairman Jeremy Leaf said the ONS release once again chimed with what agents are reporting at the coalface:
“The most comprehensive of all the property reports, this one from the ONS – though a little dated – confirms what we’re seeing on the ground. Talk of a possible market correction was premature. Activity is holding up better than expected, supported by falling mortgage rates with the overwhelming majority of transactions completing despite some hard bargaining.
“Worries about what was likely to be included in the Budget inevitably prompted many to press the pause rather than the stop button. The relief is now palpable.
“Looking forward, the amount of property for sale – particularly flats – and likely slower pace of base-rate reductions, particularly given the latest inflation news, as well as some employment nervousness, means no significant price rises are likely for the time being at least.”
Tomer Aboody, director of specialist lender MT Finance, said the market now appeared well placed for a bounce following the removal of Budget-related uncertainty and further support from lower borrowing costs:
“With the Budget now out of the way, the uncertainty and hesitancy is also over and buyers are ready to make their move. Despite a lot of negative speculation beforehand, the Budget left the property market mostly unscathed.
“With sellers coming to the market and buyers who have delayed moves now ready to proceed, as well as lower mortgage rates, the scene looks set for a bounce.
“With the money markets expecting another base rate cut from 3.75 per cent, although perhaps not at the February meeting of the Bank of England given the latest inflation figures, the improved affordability this will bring when it comes will encourage movement – and the market needs that encouragement.”
