Growth for House Prices in 2026?

Posted by Developer Money Market on 13th February 2026 -

With the New Year well underway, we turn our attention to the year ahead and the outlook for UK house prices in 2026.

UK house prices moved through a year of subtle but meaningful shifts in 2025, reflecting a market adjusting to higher borrowing costs, tax changes, and a cooling economic backdrop. By the end of the year, most major indices pointed to a slowdown in growth, with some regions showing resilience while others experienced modest declines.

Nationwide reported that annual house price growth had slowed sharply to 0.6% in December 2025, down from 1.8% in November, marking the weakest pace since April 2024. Monthly figures also showed a slight decline after seasonal adjustment, signalling a softer end to the year. Halifax recorded a similar trend: average prices fell 0.6% in December, bringing the typical UK home to £297,755, the lowest level since June 2025. Annual growth also eased to 0.3%, down from 0.6% the previous month.

Despite the subdued national picture, regional divergence remained a defining feature. Northern Ireland led the UK with 7.5% annual growth, followed by Scotland at 3.9%, while London continued to lag, posting a 1.3% annual decline. Meanwhile, the official UK House Price Index showed that as of October 2025, the average UK house price stood at £269,862, up 1.7% year-on-year but down 0.1% on the month.

Outlook for UK House Prices in 2026 – Q1 Expectations

Looking ahead to the first quarter of 2026, most forecasts point toward modest growth rather than a dramatic upswing. Zoopla expects a stronger-than-usual start to 2026 as buyers return after the Autumn Budget and seasonal slowdown, though affordability constraints will continue to cap price rises. Rightmove anticipates that new seller asking prices will rise by around 2% over the course of 2026, with lower-priced regions such as Scotland, Wales, and northern England expected to outperform higher-priced southern markets.

Broader economic conditions support this cautious optimism. Analysts expect easing inflation and potential interest rate cuts to improve mortgage affordability, helping stabilise demand. While no major index has issued a specific Q1 average price forecast, the consensus suggests slight upward movement, driven by improved buyer confidence but tempered by ongoing affordability pressures.

Overall, the UK enters 2026 with a housing market that appears steadier than in previous years—cooler, more predictable, and poised for gentle, regionally varied growth.

Developer Money Market is a specialist in property development and investment funding across the UK.

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