What’s happening with UK house prices? Latest property market moves and forecasts

The housing market has emerged from a turbulent 2025 with property prices largely flatlining – but what is in store for 2026 and beyond?

Growth stagnated in 2025 as the temporary increase to stamp duty thresholds ended in March, then many buyers and sellers put plans on hold in the run up to the Autumn Budget.

Higher mortgage rates compared to historic levels have added another layer of downward pressure – the average two-year fixed residential mortgage as of 20 January is 4.78%, according to property market data website Moneyfacts, up from 2.52% in January 2021, while the average five-year fixed residential mortgage rate is 4.87%, up from 2.71% in January 2021.

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Reports vary across the major house price indices (HPI), but largely suggest the housing market remained resilient despite these challenges.

Nationwide Building Society’s latest HPI claims consumer sentiment was “subdued” over 2025, with households “reluctant to spend and mortgage rates around three times their post pandemic lows”, although mortgage approvals remained near pre-Covid levels.

Halifax’s latest HPI echoes this sentiment, stating the housing market was depressed but resilient with overall activity levels “broadly in line with the pre-pandemic average”.

Zoopla’s latest data suggests house price growth stalled in 2025. It said sales soared over the year but buyers driving a hard bargain kept a lid on prices.

What is next for house prices though? Will they go up in 2026 or will the inertia continue? Here’s everything you need to know.

What do official house price figures show?

There are at least five different indices that measure how much UK house prices have gone up or down over the past month and year.

The most authoritative source is HM Land Registry as its data includes cash purchases as well as homes financed through a mortgage. The main drawback is that its data is published with a six-week time lag, meaning it doesn’t offer as contemporaneous a snapshot of the housing market as other indices.

The latest official figures from the Office for National Statistics (ONS) show house prices in the UK fell by 0.1% between September and October. The ONS records the average price of a UK house at around £269,862, down from £270,152 in September.

In contrast, Halifax and Nationwide’s house price indices report different average house prices as they can only use data from their own customers’ transactions and therefore have different figures.

Halifax’s latest HPI data suggests house prices dropped by 0.6% between November and December, from £299,544 to £297,755, meaning the average UK property price is the lowest it has been since June 2025.

Nationwide’s most recent HPI data said property prices fell between November and December by 0.4%, from £272,998 to £271,068.

Is confidence in the market turning a corner?

As well as the five main HPIs released on a regular basis, the Royal Institution of Chartered Surveyors (RICS) also publishes a monthly Residential Market Survey.

The report generates net balance scores between -100 and +100 in response to a series of questions put to its members (estate agents and surveyors) about how the housing market has changed.

The report offers a good insight into general sentiment across the market. The November RICS report suggested confidence was low in the aftermath of the Autumn Budget, but the December report was more upbeat.

It said new buyer enquiries registered a net balance of -24% while agreed sales came in at -19%, however both measures improved slightly from November, signalling that the downward trend is losing momentum.

Meanwhile, new vendor instructions, when an estate agent is instructed by a seller to put their property on the market, flattened to a net balance of 0%, ending several months of decline. And sales expectations over the next three months to December rose to +22% – the strongest reading since October 2024.

Where are house prices forecast to go in the short-term?

Asking prices are another useful barometer for market sentiment as these snapshots tend to be published only a few weeks after the data was recorded. Rightmove regularly publishes this type of data.

The latest data from the property website shows asking prices rose by almost £10,000 between December and January, from £358,138 to £368,031 (2.8%), the highest ever jump between these two months in 25 years. Average asking prices are now 0.5% higher compared to January 2025, Rightmove said.

The figures suggest the market has majorly rebounded after the Autumn Budget, although Colleen Babcock, property expert at Rightmove, said it could suggest sellers were overpricing their homes.

“This new year seller confidence is a good sign, but sellers would do well to listen to the guidance of their agent when setting their asking price and avoid being over-optimistic,” Babcock said.

Will house prices rise in 2026 and beyond?

Broadly speaking, experts predict house prices to grow in 2026 and beyond.

Estate agency Hamptons expects that house prices will grow modestly in 2026, anticipating a rise of 2.5% by Q4 2026.

This growth is forecast to be driven mostly by a healthier market in the West Midlands, North West and Wales.

Better affordability in these two regions is a major factor for growth where fewer buyers are priced out of the market.

Wider economic factors play a part too – the estate agency said interest rate cuts by the Bank of England in 2026 and easing inflation will combine to stimulate growth in house prices.

However, a less optimistic near-term picture has been painted by real estate firm Savills, which predicts prices to increase by a lower 2% in 2026.

There is a light at the end of the tunnel, though. Savills forecasts growth to pick up between 2027 and 2030, bringing total growth from 2025 to 2030 to 22.2%.

This growth is expected to be powered by strong performance in Yorkshire and The Humber and North East England, which are both forecast to grow 28.8% by 2030.

Savills is currently forecasting 4% growth in 2027, 6% in both 2028 and 2029, and 5.5% in 2030.

They agree with Hamptons that the outlook for affordability is one factor that will drive the speeding up of price growth. They expect wages to grow 22% between 2025 and 2029 and for the economy to strengthen closer to 2030, boosting buyer confidence.

Savills added that falling mortgage rates and more relaxed affordability tests from lenders could boost transaction volumes, making it easier for first-time buyers to get onto the housing ladder.

Zoopla also believes house price growth will be slow in 2026 at 1.5% as interest rate cuts slowly filter through to affordability.

Nationwide’s recent House Price Review suggests house prices will rise between 2% and 4% in 2026 due to falling mortgage rates and wages growth outpacing property price growth.

The “mansion tax” on homes valued at more than £2 million, introduced in the 2025 Autumn Budget and coming into effect in 2028, is “unlikely to have a significant impact on the market”, the building society added, as it will only apply to 1% of homes.