Housing market set to grow modestly in 2026 after steady year, says Halifax

The UK housing market was relatively steady in 2025 and performed broadly in line with expectations over the year, according to Halifax.

House prices grew 0.7% in the year to November, though this raised the average property price to a new high of £299,892.

The bank is forecasting house prices to rise somewhere between 1% and 3% in 2026.

Amanda Bryden, head of Halifax Mortgages, described 2025 as “one of the most settled” years for house prices over the past decade and said the “biggest talking point” was spring’s change to stamp duty threshold, which “led to a rush of buyers trying to beat the deadline”.

“March was one of the busiest months ever for completed transactions, but this spike didn’t translate into a significant rise in prices, and activity levels soon returned to normal,” she said.

Bryden said affordability remained “challenging” but had improved compared with recent years due to high wage growth, low interest rates and expanded eligibility criteria, with monthly mortgage costs as a share of income at their lowest level since 2022.

>>See also: Top 50 Housebuilders 2025

She said “speculation about potential tax rises in the run up to the Autumn Budget” kept market confidence “subdued for a time” in the second half of the year, but that prices and activity held steady. 

Halifax’s prediction of modest house price growth in 2026 comes despite Bryden’s expectation of slowing wage growth and higher unemployment. Despite these, she said that “lower interest rates and easing inflation should help to gradually improve homebuyers’ purchasing power”.