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The average asking price for a property fell in June, dipping by 0.6% (equivalent to £2,113), as historically high stock and low buyer demand have kept them on ice.

It marks the largest fall recorded in June for 14 years, and may be a result of the May heatwave distracting buyers from house-hunting, according to the latest house price index from Rightmove.

The dip means the average asking price for a property in the UK is now £376,191, around 0.5% lower than this time last year.

While summer tends to be a slower season for the housing market, this June has been particularly difficult for prices, which typically rise modestly in the month.

The recent slowdown may be a result of the high level of competition and low demand in the market, according to Rightmove.

Housing stock is still at a historic high, and sellers are responding to this by cutting asking prices more fiercely in an attempt to make their homes more attractive to buyers.

Buyer demand was down 10% year-on-year in May. One reason for this larger-than-normal dip in demand could be higher mortgage rates.

Rates have been high since the beginning of the Iran war on 28 February, the effects of which are expected to weigh heavily on the UK economy.

Inflation in particular is expected to rise, it’s unlikely the Bank of England will cut interest rates in 2026. That, in turn, means mortgage rates are set to stay high for the foreseeable future.

Rightmove adds that slumping demand may be worse this year as heatwaves and the World Cup are set to distract buyers for the next few months.

Colleen Babcock, property expert at Rightmove, said: “It’s unusual to see a price fall of this size in June, as we would normally expect to see modest price growth at this point in the year.

“What’s different this time is a combination of factors, including wider economic uncertainty, the timing of the May bank holiday and unusual heatwave, and the high number of homes on the market, which together appear to be bringing forward the traditionally slower summer market.”

While asking prices have dipped, sales activity has remained relatively steady. Though Rightmove’s data shows sales are down 6% year-on-year, 2026’s numbers are broadly in line with those from recent years (about the same as 2024 and 5% more than 2023).

Babcock added: “While the summer market has come a bit early this year, overall activity is still within a typical historic range. What has changed is some buyer behaviour; with more homes to choose from and higher borrowing costs, buyers are deliberating more and taking longer over their decisions.

“Sales activity remains stable, but it’s a very price-sensitive market with buyers looking out for the right property at the right price.”

Asking prices grew in Scotland and London

While almost all regions in the UK saw average asking prices fall, Scotland and London actually saw them rise in June.

The average asking price for a house in Scotland is up 0.8% in June, bringing it to £207,011. Sales in the country are also the fastest in the UK, with the average seller only having to wait 31 days to find a buyer. Overall, asking prices are up by 3.3% on the year.

Asking prices in London have been falling recently, but June’s data has bucked the trend. The average home in the capital is now 0.3% more expensive, with average asking prices coming in at £687,080.

Despite the June bump, asking prices for homes in the capital are still lower today than they were a year ago, slumping by 1.2%.

The poorest-performing region in the UK for asking price growth in June was Wales. The average asking price for a house in the country is now £271,459, down 1.6% this month and 0.3% on the year.

Ramshaw Mill, Wark, Hexham, Northumberland

A Grade II-listed, 12th-century former watermill with gardens arranged in a series of “rooms” that include an orchard. It has exposed beams and wood-burning stoves. 8 bedrooms, 3 bathrooms, 4 reception rooms, 2 kitchens, outbuildings, courtyard, barn, 1 acre.

Price: £1.2m Finest Properties 0330-111 2266

The Old Vicarage, Castle Hedingham, Halstead, Essex

A Grade II-listed, early 18th-century house overlooking a castle and a church, with gardens that include a heated swimming pool and an orchard. It has grand fireplaces and vaulted cellars. 9 bedrooms, 5 bathrooms, 3 reception rooms, gym, 1-bedroom cottage, 1 acre.

Price: £1.75m Knight Frank 01394-334570

Bretforton Hall, Bretforton, Evesham, Worcestershire

A Grade II-listed late 18th-century house with a crenellated tower and two acres of gardens that include a swimming pool and an orchard. The house has a drawing room with Gothic arched windows, a vaulted ceiling and period fireplaces. 6 bedrooms, 5 bathrooms, 4 reception rooms, study, studio, breakfast kitchen, garage, 2 acres.

Price: £2.3m Morgan Aps 01905-384848

Hawksfield, Clifford, Herefordshire

A modern Passivhaus situated close to Hay-on-Wye. It has an A-grade energy performance certificate, gardens that include a dining terrace on the edge of an ornamental pond and a small orchard. The house is largely open-plan with an open-tread oak staircase and French doors leading onto a balcony. 3 bedrooms, 2 bathrooms, reception room, open-plan kitchen/dining/living room, en-suite studio outbuilding, 0.5 acres.

Price: £895,000 The Modern House 020-3795 5920

Copplestone House, Tiverton, Devon

A house set in mature gardens with outdoor entertaining areas, a covered outdoor kitchen, a walled kitchen garden and an orchard. It has exposed beams, open fireplaces, and a drawing room with French doors opening onto a terrace. 6 bedrooms, 4 bathrooms, 2 reception rooms, 1-bedroom annexe, barn, 2.5 acres.

Price: £1.65m Strutt & Parker 01392-215631

Woolgarston, Corfe Castle, Wareham, Dorset

A period cottage in a sought-after village within the Isle of Purbeck, an Area of Outstanding Natural Beauty. The large gardens include stone terraces and an orchard enclosed by a mature beech hedge. The house has exposed beams, a large inglenook fireplace and a kitchen with an Aga. 3 bedrooms, 2 bathrooms, reception room, outbuilding with utility and store, 0.62 acres.

Price: £1.13m Savills 01202-856800.

The Green, Nun Monkton, York, North Yorkshire

A Grade II-listed Georgian house overlooking the village green. It is set in large gardens with terraces and an orchard. It has exposed beams, panelled walls, open fireplaces and a dining kitchen leading onto a courtyard. 5 bedrooms, 3 bathrooms, 3 reception rooms, study, outbuilding with garage and games room, greenhouse, summerhouse, 0.7 acres.

Price: £1.695m Savills 01904-617820.

The Orchards, Bedham, Fittleworth, West Sussex

A picturesque Grade II-listed cottage dating back to the 1600s with landscaped cottage gardens that include topiary, winding paved paths, a swimming pool, two ponds, a stream and a wildflower meadow, along with an established orchard planted with apple, quince, cherry and plum trees. The house has exposed wall and ceiling timbers and inglenook fireplaces. 3 bedrooms, bathroom, reception room, barn, 1.56 acres.

Price: £1.43m Knight Frank 01428-770562.

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UK house prices have fallen and the negative trend could worsen before the end of the year, experts warn.

The latest house price index (HPI) data from Nationwide reveals property values fell by 0.6% in May to £278,024, compared with the month before.

Meanwhile, the building society said annual house price growth slowed to 1.7%, down from 3% in April.

Robert Gardner, chief economist at Nationwide, blamed the fall on the conflict in the Middle East, which has seen mortgage rates rise and consumer confidence hit.

Data firm Moneyfacts says the average interest rate on a two-year fixed mortgage deal is 5.68% as of 1 June, up from 4.83% on 27 February, a day before the US and Israel launched strikes on Iran.

Gardner said: “Given the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates, some loss of momentum was to be expected.”

Nationwide is not the only major lender to show a month-on-month fall in house prices since the outbreak of tensions in the Middle East. The Halifax house price index reported a 0.5% fall in the month to March 2026 and a further 0.1% drop in the month to April.

Meanwhile, the latest data from the Office for National Statistics shows the average UK house price fell from £269,204 to £268,132 between February and March 2026.

Could house prices fall further in 2026?

Lenders, experts and economists were relatively optimistic about the prospects for future UK house price growth at the start of 2026, but tensions in the Middle East have tempered any positivity.

The latest RICS UK Residential Market Survey suggests higher mortgage rates have weighed down on buyer demand.

There’s also a glut of homes on the market. According to Rightmove, the number of homes for sale is at its highest level for this time of year since 2015.

This is being reflected in asking prices. Rightmove’s latest HPI shows average asking prices were 0.3% lower in May 2026 compared to the same month a year ago.

Estate agents Savills is now predicting house prices to fall by 2% in 2026, revised down from a forecast made in December 2025 of 2% growth.

In London, house prices could fall by as much as 4% and 3.5% in the South East and East of England, Savills suggested.

Meanwhile, Deutsche Bank is expecting property values to drop by between 3% and 5% this year.

Sanjay Raja, UK chief economist at the bank, said the Iran conflict had “likely put an end to any hopes of an imminent housing market recovery” in 2026.

Even economists and estate agents that are more upbeat in their predictions have revised down earlier forecasts.

Estate agent Knight Frank is now expecting property values to increase by 1.5% in 2026, down from a previous estimate of 3% made in September 2025.

Tom Bill, head of UK residential research at Knight Frank, said he expected “continued downward pressure” on housing transaction activity as lower interest mortgages drop off the market.

Economic research firm Pantheon Macroeconomics has also forecast prices to increase by just 1% in 2026, down from a previous estimate of 3%.

We reveal whether it’s a good time to sell a house in another article.

Asking prices on homes in some seaside towns are bucking the British trend and showing up to double digit growth, according to new research.

Rightmove has revealed the British coastal towns where property asking prices rose the most in the 12 months to May 2026.

Asking prices went up the most in Bootle, Merseyside, rising by 11% to £141,680, the property portal’s data shows.

In family-friendly Crosby, which is less than 20 minutes away by car, prices increased by 9% to £330,900.

On the other side of the River Mersey, asking prices in Wallasey, home to popular seaside destination Marine Point, rose by 7% to £200,753.

The list also featured five Welsh coastal towns, including Penarth, South Glamorgan, where asking prices jumped by 8% to £433,081 in the year to May 2026.

In Llantwit Major, South Glamorgan, asking prices rose by 8% to £340,033.

Asking prices rose by 7% in Llanelli, in Carmarthenshire (to £201,570), and Bangor, in Gwynedd (£220,622). They increased by 6% in Porthcawl, South Glamorgan, to £359,412.

Barrow-in-Furness, Cumbria, saw asking prices rise by 6% in the year to May 2026 to £185,169.

One Scottish town made the top 10 list – Helensburgh in Dunbartonshire recorded average asking price growth of 6% to £247,953.

Mary-Lou Press, president of trade body NAEA Propertymark (National Association of Estate Agents), said: “Many of the fastest-growing seaside markets remain relatively affordable, especially in parts of the North West and Wales. For many buyers, these areas can offer a balance of lifestyle, space and value.

“We’re continuing to see demand driven by flexible working and buyers reassessing where they want to live, but consumers should look beyond headline price growth and also consider factors such as transport links, local jobs, flood risk and ongoing housing costs.”

Source: Rightmove, analysis of more than 100 coastal towns, comparing year-on-year change in May 2026

The cheapest seaside towns to buy a home

Rightmove also analysed the 10 overall cheapest seaside towns to buy a home, with asking prices starting from just £120,000, well below the UK average.

All of the hotspots are based in the north of England or Scotland, including Peterlee in County Durham where the average asking price is £120,657.

Asking prices in the port town of Grimsby, Lincolnshire, are just £133,706 on average.

Head a couple of hundred miles north and you’ll find Ashington, where the average property asking price is £133,775.

Bootle, despite being a town where house prices have risen the most in the last year, is still one of the cheapest places to buy a home on the coast (£141,680).

Blackpool and Fleetwood, both in Lancashire, also featured in the top 10 cheapest seaside hotspots. The average asking prices are well below the UK average house price, at £142,277 and £147,910, respectively.

Seaham, County Durham (£157,994) and Ayr, Ayrshire, Scotland (£157,754) also made the top 10 list.

Source: Rightmove, analysis of more than 100 coastal towns, comparing year-on-year change in May 2026

The most expensive seaside towns to buy a home

The 10 most expensive coastal towns to buy a home are all found in the south of England.

Topping the list is Sandbanks, in Poole. The average property asking price there is £1,119,945, according to Rightmove.

Canford Cliffs, less than two miles up the coast, is the second most expensive place to buy a home near the sea (£1,045,533).

Lymington, Hampshire, also made it on to the list of most expensive coastal spots. Buyers here are looking at an average asking price of £545,926, well above the UK average.

Barton on Sea, in Hampshire (average asking price of £496,143), Lyme Regis, in Dorset (£474,417), and St. Ives, in Cornwall (£461,959), are also on the pricier end of the spectrum.

Source: Rightmove, analysis of more than 100 coastal towns, comparing year-on-year change in May 2026

Having an offer accepted on a property should clear the path to moving into a new home – but most sales collapse after buyers and sellers have already paid out thousands in costs, according to new research.

More than half of house moves (58%) fall through after an offer has been accepted, costing buyers and sellers an estimated £2,830 in direct costs such as legal fees, surveys and mortgage costs.

One in six transactions collapse after four months and one in 10 falls through after five months or more. Sometimes it is because vital information about the true condition of the property is not disclosed upfront. Other times affordability issues arise late into the process putting the house price out of reach.

With around 1.2 million residential transactions taking place each year, the total cost could be as high as £2 billion a year in wasted time and fees as people try to buy a house or sell their home.

The findings from the Open Property Data Association (OPDA), based on a survey of 5,000 recent home movers, highlight deep-rooted problems with the home‑buying process.

The data comes at a time when the economy and housing market are already under strain. Higher interest rates, tighter affordability, and longer transaction times have increased the risk of deals collapsing before completion, leaving families financially stretched and emotionally drained.

When asked how they were affected by a collapsed sale or purchase 43% cited emotional stress as the biggest impact. More than four in 10 people (41%) said their plans were significantly delayed.

The impact was felt most acutely by older home movers. Among those aged 55 and over, almost six in ten (59%) reported high levels of emotional stress.

Maria Harris, chair of the OPDA, said: “These figures lay bare a housing market that is failing consumers at every stage. Far too many transactions collapse because crucial information only comes to light weeks or even months after an offer is made. By then, buyers and sellers have already invested significant time, money and emotional energy.”

How to avoid a property chain collapsing

Harris is calling for upfront, standardised property data through digital property packs to be available to all buyers to avoid any hidden surprises that could jeopardise a home buying chain.

Phil Spencer, property expert and founder of property advice website Move iQ, added: “For buyers and sellers, these fall‑throughs often mean months of uncertainty, money lost on fees that can’t be recovered, and plans put on hold. Much of that pain could be avoided if people were given clear, reliable property information upfront.

“When buyers know what they’re committing to from the start, they can proceed with confidence, avoid nasty surprises later on, and reduce the risk of deals collapsing after so much has already been invested.”

While buyers are waiting for upfront digital property documents to become mainstream, these are the issues Ian Futcher, financial planner at Quilter warns to be aware of in the current market that could jeopardise a sale – and how to prepare for them.

1. Get an agreement in principle early

The two most common causes of chains collapsing are affordability issues – where buyers either fail to secure a mortgage or see offers revised as rates change – and survey results uncovering problems that lead to renegotiation or withdrawal.

In the current environment, Futcher said mortgage dynamics are playing a bigger role. “As rates have shifted more quickly in the UK than in some other markets, buyers can find themselves reassessing what they can afford midway through a transaction, which increases the risk of deals falling apart,” he pointed out.

“Securing a mortgage agreement in principle early in the process can provide greater certainty on borrowing capacity,” Futcher said.

2. Use a good mortgage broker

Working closely with a broker or adviser helps ensure buyers are matched with suitable products from the outset and give flexibility should cheaper deals become available in the run up to completion. Seek recommendations from friends and family who’ve had positive experiences, or use a free matchmaking service like VoucherFor or Unbiased to find a vetted mortgage broker.

3. Keep transactions moving

Futcher said: “Delays often create the conditions for second thoughts or changing circumstances, so maintaining regular communication with lenders, solicitors and agents can help keep momentum and avoid surprises emerging late in the process.”

4. Factor in changes in mortgage rates

Buyers who have factored in potential rate movements and ensured they have sufficient financial headroom are better placed to proceed, even if market conditions shift slightly before completion, said Futcher.

“In a market where uncertainty remains elevated, taking advice and stress-testing affordability upfront can make the difference between a successful completion and a collapsed chain,” he said.

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Almost half of UK homes listed in the past three years didn’t sell, with many homeowners failing to price them accurately, new research suggests.

A survey of 2,064 people by property portal Zoopla found 44% of homeowners listed their homes but couldn’t sell, of which a third (34%) said their property asking price was too high despite believing it was fairly valued beforehand.

Meanwhile, 53% of respondents who did sell in the last three years said they had to cut their asking price to attract a buyer.

Separate data from Zoopla suggests the average home sold for 3.5% below asking price in the first three months of 2026 – equivalent to £18,800 less – as sellers repriced their homes to draw in offers.

Richard Donnell, executive director at Zoopla, said: “Almost half of homes listed never sell. That isn't down to luck or the market, it comes down to a few decisions, starting with understanding what your home is actually worth today.

“The average homeowner selling in 2025 had been in their home for nine years, meaning many owners are out of touch with what their home may be worth.”

We reveal what house features homebuyers look for most in another piece.

Sellers feeling the property pressure

The survey by Zoopla found sellers are inaccurately valuing their homes because they’re rushing the process.

More than six in 10 (61%) of those who didn’t sell their homes in the last three years viewed other properties before getting a valuation of their own home, while nearly a third (32%) put in an offer on another home before knowing how much theirs was worth.

As a result, more than one in five (21%) said their asking price was influenced by what they needed for their next property rather than the true market value of their existing home.

Younger sellers keen to trade up were found to be more likely to try and test the market and get more for their home than it’s actually worth too.

Just over half (52%) of sellers under 35 managed to sell their home in the last three years, versus 63% of those aged 65 and over.

For under 35s, the main reason for selling was scaling up to a larger home (44%) while for sellers aged 65 and older the primary motivation was downsizing (34%).

This pressure to upsize among younger sellers showed in asking prices, with a fifth (20%) under 35 saying they had overpriced a property in the last three years.

We look at whether now is a good time to sell in another article.

How to price your home accurately to try and sell it quicker

Accurately valuing your home will ensure buyers are more likely to put in an offer rather than ignoring the property during their research.

A number of websites and property portals, such as Zoopla and Rightmove, have online valuation tools which are free to use.

Zoopla bases its estimates on data from HM Land Registry and Registers of Scotland, official survey records, live for sale and to rent property listings and Energy Performance Certificates (EPC).

Rightmove’s valuation tool also pools its estimates from HM Land Registry and Registers of Scotland data, as well as listings live on its website.

The Land Registry website tells you how much houses have sold for in your area.

Meanwhile, you could get a property valuation done by an estate agent who has knowledge of the local market, and many will do it for free.

When it comes to setting an asking price, it might be tempting to test the market with an inflated price, but this will likely delay the selling process.

Polly Ogden Duffy, managing director at estate agent John D Wood and Co., said: “Sellers often worry about underselling, but in reality it’s far easier to oversell a property than undersell it. If a home is priced too high, buyers will simply move on – and more often than not, it will end up needing a reduction later.”

Pay attention to buyer signals as well. If viewings aren’t converting to solid offers, it could be because you’ve overvalued your property, your listing features poor pictures or your home gives off a poor first impression.

Mark Manning, managing director of independent estate agent Northern Estate Agencies Group, said: “Think carefully about how your property is presented both online and at the kerb – first impressions really do still matter – and be prepared to adapt your strategy if your initial approach hasn’t landed. The sellers who struggle are almost always the ones who simply wait and hope something changes.”

The Coachman’s House, Dollarbeg, Dollar, Clackmannanshire

A renovated Victorian house built around a courtyard with a garden that includes an all-weather tennis court. 5 bedrooms, 4 bathrooms, kitchen, 5 dressing rooms, 2 reception rooms, home cinema, 2-bedroom cottage, gym with sauna, woodland, 6.6 acres.

Price: £2.25m+ Savills 0131-247 3738.

Haughley Park, Stowmarket, Suffolk

A Grade I-listed Jacobean manor in 240 acres of parkland with gardens that include a croquet lawn and a tennis court. It has ornate fireplaces and a grand, carved wooden staircase. 7 bedrooms, 5 bathrooms, 5 reception rooms, study, offices, 2 kitchens, conservatory, 5-bedroom farmhouse, outbuildings.

Price: £4.25m Knight Frank 01394-334570.

East South Fork Rd, Utah, USA

A house in the Provo Canyon in Utah with a sports building that includes a basketball court, a squash court, a climbing wall and a games room. The house has floor-to-ceiling windows and open fireplaces. 4 bedrooms, 5 bathrooms, split-level open-plan kitchen/living area, home cinema, 2-bedroom guest house, landscaped gardens, 29.6 acres.

Price: $43m Summit Sotheby’s International Realty +1 800 641 1884.

Thistle Hall, Wickham Bishops, Essex

A contemporary property built in a Georgian style with a lake and a synthetic putting green with a bunker and tees in the landscaped gardens. It has an indoor swimming-pool complex, a kitchen with a professional-grade oven, and French doors leading onto a terrace. 5 bedrooms, 5 bathrooms, reception hall, 4 reception rooms, annexe, outbuildings, 25.63 acres.

Price: £5.5m Strutt & Parker 01245-258201.

The Old Vicarage, Bleasby, Nottinghamshire

A restored, Grade II-listed country house set in gardens that contain an all-weather tennis court. The first-class leisure facilities include an indoor heated swimming pool covered by a lantern-glass roof, along with a gym and games area. The house has open fireplaces and an open-plan kitchen and living area. 5 bedrooms, 4 bathrooms, 2 reception rooms, 3-bedroom coach house, stables, paddock, 5.3 acres.

Price: £2.45m Fine & Country 0115-982 2824.

Lancewood, Windlesham, Surrey

A contemporary house set in gardens that include a heated swimming pool and professionally surfaced half-court basketball court. It has floor-to-ceiling windows and a cinema. 5 bedrooms, 5 bathrooms, dining kitchen, reception room, 1-bedroom annexe, 3.68 acres.

Price: £7m+ Strutt & Parker 01344-921985.

Galon Y Mynydd, Coed Y Bronallt, Pontarddulais, Swansea, Glamorgan

A modern house overlooking the River Loughor, with an outdoor, professionally finished football pitch with full-size Fifa-approved goal posts and an indoor swimming-pool complex. The house has stone floors and a state-of-the-art kitchen. 5 bedrooms, 3 dressing rooms, 6 bathrooms, open-plan kitchen/living area, 2 reception rooms, gardens.

Price: £2.5m Country Living Group 01437-616101.

Harmony House, Westham, Wedmore, Somerset

A detached, modern house overlooking landscaped gardens that include an enclosed football pitch and an outbuilding with a gym and a games room. The house has a glazed, 46ft open-plan dining kitchen and living area. 4 bedrooms, 3 bathrooms, open-plan dining kitchen/living area, reception room, cinema, utility, cloakroom, outbuilding with gym and first-floor games room, garage.

Price: £1.79m Knight Frank 01173-171996.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

UK property prices fell by 0.5% in March as the fallout from the US-Iran conflict hit the housing market.

The average house price dropped from £301,151 in February to £299,677 in March, according to the latest data from Halifax.

The lender put the slump down to the conflict in the Middle East, which has seen mortgage rates rise on fears inflation could accelerate over the coming months.

Amanda Bryden, head of mortgages at Halifax, said: “The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East.

“Concerns about higher energy prices have pushed up inflation expectations, which in turn led to a rise in mortgage rates, reducing confidence that interest rates will be cut this year and dampening the initial momentum in the market seen at the start of the year.”

The pace of house price rises on an annual basis also went down from 1.2% in February to 0.8% last month as the market showed signs of slowing.

Some UK regions suffered more than others. Average house prices in the South East, where average values are higher, went down by 1.9% annually to £383,573 in March. In London, prices slumped by 1.2% to £536,751.

Strong house price growth is still being seen in the northern regions of England, where property values are lower.

The North East saw a 5% rise in the average price of a home year-on-year to £184,119 in March while the North West recorded annual growth of 3.1% to £247,442.

Northern Ireland continues to see house prices rise the most across the UK. In the year to March 2026, they surged by 8.7% to £224,809.

Scotland and Wales also recorded buoyant annual growth, with average prices up 4.4% and 1.6%, respectively. The average home in Scotland is worth £222,716 and £230,909 in Wales.

Credit: Halifax

What will happen to mortgage rates?

The latest monthly data from Halifax is one of the earliest signs of how the conflict in the Middle East is putting a stop on UK house price growth, according to experts.

Karen Noye, mortgage expert at wealth management firm Quilter, said: “March is the first full month in which the conflict in Iran fed through into UK mortgage pricing, making this data set an important early test of how higher borrowing costs are starting to affect the housing market.”

The US and Iran agreed a two-week conditional ceasefire on Tuesday 7 April, which sent oil prices plummeting and stocks rising.

However, the effective closure of the Strait of Hormuz off the coast of Iran since the start of the war in February, which led to oil, gas and fertiliser prices surging, is still likely to hit the housing market in the months to come.

Adam French, head of consumer finance at data firm Moneyfactscompare, said easing tensions in the Middle East would push down expectations for future interest rate rises, taking “immediate upward pressure off mortgage rates”.

However, mortgage rates “are likely to remain higher for some time yet”, he added.

“The volatility of the conflict can quickly move markets, which may leave many lenders cautious about making any sudden moves.

“The longer the ceasefire holds and markets calm, the more the mortgage market will stabilise, and rates could even begin to edge lower. But for now, it’s more likely to slow or pause increases rather than trigger any sharp falls.”

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Times are tough for first-time buyers, with house prices remaining elevated and mortgage rates climbing in recent weeks.

But there are still hotspots in Britain where first-steppers have a better chance of getting on the property ladder.

Nationwide has ranked the most affordable places for first-time buyers looking to purchase a home when comparing house prices against average wages, with Inverclyde in Scotland taking the crown.

Average first-time buyer house prices are just 2.3 times average earnings in the local authority, based on Nationwide’s analysis of UK Land Registry and ONS wage data.

Properties within the Inverclyde area, on the west coast of Scotland and home to the towns of Port Glasgow and Greenock, average out at an inexpensive £100,000.

Burnley, in the North West of England, is also one of the most affordable places for first-time buyers, Nationwide said.

Average first-time buyer house prices are 2.8 times average earnings in the Lancashire market town.

Meanwhile, first-steppers looking for the cheapest place to buy in the North of England should head to Hartlepool, where average first-time buyer house prices are 2.9 times average earnings.

The most affordable spot for first-time buyers in Yorkshire is Kingston upon Hull. Average property prices there are three times the mean salary.

Nationwide’s research also revealed the cheapest areas to buy in all other regions in Britain, including Wales (Merthyr Tydfil), the West Midlands (Stoke-on-Trent) and East Anglia (Great Yarmouth).

The most affordable place for first-time buyers in the South East of England is Gosport, where average house prices are 4.7 times average earnings.

In London, first-steppers’ task of getting on the ladder is tougher. In this part of the UK, the Bromley area is the most affordable place to buy a first home, Nationwide said. Average property prices are 6.2 times the average salary there.

Credit: Nationwide

Where has first-time buyer affordability improved the most?

In Britain, around 70% of local authorities have seen an improvement in affordability over the last year when comparing house prices with wages, according to Nationwide.

The majority of the areas where affordability has become less stretched are in London, where house price growth has struggled in recent years. However, house prices in the capital still remain “elevated” relative to earnings compared to other parts of Britain.

Islington, London, is the area where first-time buyers have seen the biggest improvement in their chances of getting on the ladder across England, Wales and Scotland. Average house prices are worth 7.8 times average earnings compared to 10.6 times in 2024.

Meanwhile, first-time buyers are finding it easier to get on the ladder in the City of London. Average house prices are worth 8.4 times average salaries compared to 11.1 times in 2024, a difference of 2.7.

Six other London boroughs are in Nationwide’s list of the top 10 authority areas where affordability has become less stretched for first-time buyers, including Hammersmith and Fulham, Barnet and Hackney.

Outside of London, Norwich saw the biggest improvement in affordability for first-time buyers between 2024 and 2025, driven by a large rise in average wages in the area.

First-time buyers are also finding it easier to get on the ladder in Welwyn Hatfield, Hertfordshire, as higher salaries meet falling house prices.

Credit: Nationwide

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The commuter belt is being shaken up by a return to the office, families looking for affordable ways to move up the housing ladder and better transport links.

The ‘race for space’ that dominated the coronavirus period, when homebuyers snapped up coastal and rural properties, has subsided, according to estate agent Savills.

But second steppers and growing families with less equity due to a poor macroeconomic backdrop and higher mortgage rates, are still pushing the traditional commuter belts further afield than before the pandemic.

Better transport links, such as the new Elizabeth Line in the South East, have also opened up areas previously unavailable to people looking to escape the hustle and bustle.

Frances McDonald, director of research at Savills, said: “During the pandemic, a combination of the ‘race for space’ and the rise of hybrid working meant buyers were willing to compromise on longer commutes in favour of lifestyle priorities.

“Five years on, our latest analysis shows the commuter belt has tightened again as office attendance has increased, but it remains less compact than it was before the pandemic.”

For those considering a move to the commuter belt, which locations offer affordable house prices and cheap train travel?

Savills compiled a list of areas with train stations offering direct lines in London, Birmingham, Manchester and Edinburgh offering the cheapest season tickets, plus how much homes in these areas will set you back.

Commuter hotspots near London

Iver, Buckinghamshire

With average house prices sitting around £540,000, the greenbelt village of Iver is ideal for buyers looking for countryside living combined with accessibility to the capital.

Season tickets, taking you from Iver train station into London Paddington in just 28 minutes, cost £2,868 a year.

Prittlewell, Essex

House prices in this inner city area of Southend-on-Sea come in at an affordable £295,326 and trains from Prittlewell station into London Liverpool Street take just under an hour.

A yearly season ticket will set you back £5,120 for the year, but with property prices just £25,000 over the UK average of £270,259, this is an ideal spot for those wanting seaside living within a stones throw of the capital.

Corby, Northamptonshire

Corby is an option for buyers looking for somewhere further afield with plenty of green spaces but with cheaper housing – the average house price here is £225,245.

Trains from the town’s main train station take just 66 minutes to get into London St Pancras, but you will have to fork out £10,624 a year for a season ticket.

Commuter hotspots near Manchester

Styal, Cheshire East

Homes in Styal have an average price of £411,992 and trains into Manchester Piccadilly station take just 43 minutes. A season ticket will set you back £1,596.

The village sits on the outskirts of Manchester with National Trust woodlands nearby to explore, making it popular with dog walkers and families.

Bamford, High Peak

Average house prices average out a slightly steeper £523,615 in Bamford, a leafy suburban area in the borough of Rochdale close to Ashworth Valley.

Trains take just under an hour to get into Manchester Piccadilly with a season ticket costing £3,560.

Holmes Chapel, Cheshire East

Trains from Holmes Chapel – the hometown of singer Harry Styles – take just 42 minutes to get into Manchester Piccadilly, despite the village being over 20 miles from the city centre, with season tickets costing £3,260.

The average home there will cost you £350,304.

Commuter hotspots near Birmingham

Wootton Wawen, Stratford-upon-Avon

The small village of Wootton Wawen is about 20 miles from Birmingham and over six miles north of Stratford-upon-Avon, the birthplace of William Shakespeare.

Trains from the main station into Birmingham Moor Street take 46 minutes at a yearly cost of £1,880. The average house price is a bit more expensive at £520,711.

Hartlebury, Wychavon

This historic rural village is home to a 13th century castle and just 52 minutes from Birmingham Moor Street on the train.

A season ticket costs £1,552 and average house prices aren’t too steep either, costing around £376,790 on average.

South Wigston, Oadby and Wigston

This large town close to Leicester is home to around 7,000 people and offers a direct line train into Birmingham New Street station that takes 49 minutes.

A season ticket will cost you a more dear £3,972 a year, although the average house price is less than £250,000.

Commuter hotspots near Edinburgh

Camelon, Falkirk

A suburb in Falkirk, trains into Edinburgh Waverley station from Camelon take just 37 minutes, with season tickets costing £2,396.

Trains into Glasgow take around a similar time too, while house prices are a major plus – the average property costs £173,381, well below the UK average.

Fauldhouse, West Lothian

Another village equidistant between Glasgow and Edinburgh, Fauldhouse train station offers commuters a 36 minute journey into Edinburgh Waverley at a yearly cost of £2,224.

The average property price is only £155,947 too. Inside the village of around 5,000 residents is a library, pool and gym, golf course and two primary schools.

Stirling, Stirling

Trains from Stirling into Edinburgh Waverley take 50 minutes and season tickets cost £2,396. Homes are a slightly pricier £215,224 on average.

Close to the Ochil Hills and known as the ‘Gateway to the Highlands’, the town is home to a university, the historic National Wallace Monument, commemorating the life of Sir William Wallace, and a number of well-respected primary and secondary schools.

The average house price for the UK has hit £300,000, but a property on the most expensive street in the UK will cost you over £12 million.

It will come as no surprise the most expensive street in the UK is in London, where house prices are still relatively high at £553,258 on average – 104% higher than the UK average of £271,188.

But some streets will cost well above the average and are considered as some of the most expensive in the UK.

We reveal the most expensive streets in the UK, according to the latest Rightmove data.

What are the most expensive streets in the UK?

A London road has topped the list as the most expensive one in the UK – it’s Winnington Road, Barnet.

The average asking price of a property on Winnington Road, Barnet, averages out at a handsome £12,538,095, according to analysis by Rightmove.

Streets across London dominate the top 10 list, with just one road outside the capital featuring.

Colleen Babcock, Rightmove’s property expert, said: “Britain’s most expensive streets always capture the nation’s attention and this year we see Winnington Road in North London as Britain's most expensive street based on asking prices.

“In fact, this year's list is taken up almost entirely by London addresses, showing the city still reigns supreme when it comes to ultra-prime property.”

We look at whether London’s property boom is over in another piece.

After Winnington Road, Chester Square in Westminster is the next most expensive street to buy a property, with an average asking price of £11,546,428.

Another Barnet street is next – The Bishops Avenue – commanding an average asking price of £8,930,650.

Four other streets in Westminster take up a large bulk of the top 10 list, including Ebury Square (£8,521,111), Knightsbridge (£8,260,000) and Wilton Place (£7,921,429).

The only street in the top 10 most expensive in the UK outside London is East Road in the leafy suburban town of Elmbridge, Surrey. The average asking price there? A substantial £8,795,714.

Credit: Rightmove

What are the most expensive streets outside of London?

While London is the frontrunner in being home to the most expensive streets in the UK, Rightmove’s research also revealed the priciest addresses outside the capital.

East Road in Elmbridge tops the list by some way, with the next most expensive street Newlands Avenue, Hertsmere, in the East of England.

Just north of the English capital, the average asking price there is £3,950,000, according to Rightmove’s analysis.

Congleton Road, in Cheshire East, follows, with homes down this road commanding an average asking price of £3,323,500.

Larch Avenue, in Windsor and Maidenhead (£2,779,167) and Salterns Way, in Bournemouth, Christchurch and Poole (£2,460,000) also come out high in the top 10 list.

Credit: Rightmove

What are the most expensive streets across each UK region?

Because southern and middle England dominated the list of locations with the most expensive streets overall, Rightmove also looked at the priciest roads for each region of the UK.

Main Street, in Charnwood, has the highest asking price in the East Midlands, with a home there costing an average of £1,238,571.

Runnymed Road, in Northumberland, commands the highest asking price in the North East, with a home there worth £1,726,111.

Drumsheugh Gardens, in Edinburgh, is the most expensive street to buy a home in Scotland – asking prices average out at £560,000.

In Wales, Hollybush Road, Cardiff, is the priciest spot to bag a home – average asking prices there sit at £1,237,500, Rightmove said.

Tiddington Road in Stratford-on-Avon is the most expensive street to buy in the West Midlands (£2,306,667), while Wigton Lane, Leeds, is the priciest road in Yorkshire and The Humber. Buying a home here will set you back £1,317,857.

Credit: Rightmove

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Nothing quite beats taking in a breathtaking view – and having one from your home could boost its value by tens of thousands of pounds.

Simply owning a property with a view of the sea, rolling countryside or a cityscape can bump up its asking price by 28%, according to new research from estate agents Yopa.

Yopa analysed properties currently on sale in England surrounded by attractive scenery and compared their asking prices against similar homes (based on size and number of bedrooms) in the same postcodes without good views – and found vast differences.

Across England, homes offering desirable views commanded prices 28.1% higher (£712,192) than like-for-like properties (£556,531) in the same areas without good views.

Asking price gap biggest in the North East

The gap in price between homes with a view and those without was biggest in the North East of England, according to Yopa’s research.

The average price of these types of properties in the region is £501,822, compared to £372,744 for those without views – a 34.6% jump.

In the East Midlands, homes with attractive backdrops command asking prices of £601,737 on average, versus £451,686 for comparable properties without picturesque views – a 33.2% difference.

In the North West, homes with a view come with a mean asking price of £554,595 versus £420,649 for those without – a difference of 31.8%.

Even in crowded London, where you’d think homes with a view are few and far between, you can still get tens of thousands of pounds more for a property with a decent panoramic than one without.

A property in the capital with a great view has an average asking price of £1,087,148 while one without is likely to go for £912,726, a 19.1% gulf.

Verona Frankish, chief executive officer of Yopa, said: “Whether it’s coastline, skyline, or countryside, buyers are clearly willing to pay a substantial premium for a home that offers something special beyond its four walls.

“What’s particularly notable is that the strongest premiums are found outside of the nation’s most expensive housing markets. In many northern regions, where overall house prices tend to be lower than in the south, the relative value of a great view becomes even more pronounced.”

Credit: House price data sourced from PropertyData by Yopa

Which regions have the most homes with a view?

The English regions with the highest proportion of homes with great views are the South West and South East, respectively, according to Yopa’s analysis.

Almost 34% of all homes across England with great views are based just in the South West while more than 25% found in the South East.

Around 11% are in London while 5.7% are in the East of England.

The region with the lowest proportion of homes with great views is the North East. Just 1.9% of all homes in England commanding stunning views are found there.

Meanwhile, just 3.8% and 4.9% of all homes with stunning views are in the East Midlands and West Midlands, respectively.

We reveal what other key features can boost the value of a home in another piece.

The housing market is showing tentative signs that it may be turning a corner with sentiment around sales and house prices becoming less negative, according to the Royal Institution of Chartered Surveyors (RICS).

The property market was hampered at the end of 2025 amid uncertainty about tax rises in the Autumn Budget, which led to a dip in house prices towards the end of the year.

Recent house price index data from Halifax and Nationwide shows lower mortgage rates have been taking a while to filter through to wider market activity.

But the latest figures from the January RICS Residential Market Survey suggest there is more optimism at the coalface.

The RICS 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 data shows several key indicators have continued to improve, recording their least negative readings in months.

New year, new housing market optimism?

RICS members reported that new buyer enquiries improved in January, with the net balance rising to -15%, up from -21% in December and -29% in November.

Agreed sales followed a similar trend, with the latest net balance of -9% – the least negative reading since June 2025.

Hopes for house price growth at a national level appear to be stabilising. The net balance for price growth over the past three months stood at -10%, improving steadily from a low of -19% in October 2025.

House price growth remains strongest in Scotland and Northern Ireland, with upward trends also reported in the North West and North of England, according to the report.

In contrast, London, the South East, South West and East Anglia continue to lag behind the national average reflecting ongoing affordability challenges, RICS said.

Looking ahead, expectations for sales over the next three months eased to a net balance of +4%, but rose to +35% when considering the next 12 months – the strongest reading since December 2024.

Simon Rubinsohn, chief economist for RICS, said: “There are early signs that market conditions may be improving after a challenging period, although activity levels are still subdued, meaning any recovery is likely to be gradual.

“While the strengthening 12-month outlook is encouraging, near-term expectations remain relatively soft, reflecting ongoing economic uncertainty. Whether this tentative improvement develops into sustained momentum will depend heavily on the trajectory of mortgage rates and broader macro confidence over the coming months.”

Will house prices rise in 2026?

There are hopes that lower mortgage rates will boost buyer demand and ultimately push up house prices.

But mortgage pricing has actually been rising in recent weeks and the Bank of England held rates in February amid high inflation, which may well dampen activity in the short term.

This is reflected in responses to the RICS’ survey, with sentiment about house price growth negative over the next three months.

However, +43% of respondents anticipate higher prices over the year ahead which is the most positive outlook since February 2025.

Tom Bill, head of UK residential research at Knight Frank, said: “Plans put on hold by the Budget were activated either side of Christmas, which produced positive demand signals in the early weeks of the year.

“However, buyers and sellers are once again operating against the unsettling backdrop of a prime minister on borrowed time. A leadership challenge is likely to derail sentiment in the short term but demand in the longer-term will be shaped by the economic policy platform of any new prime minister and whether falling inflation can drag down mortgage rates with it.”

The average price of a house in the UK has risen above £300,000 for the first time, as buyers have returned to the market after a December dip.

The milestone will be welcomed by homeowners who, on average, will have seen the price of their property reach new highs. But for prospective buyers, the growth will depress affordability even more.

House prices increased by 0.7% month-on-month between December and January, bringing the average price of a home to £300,077, new data from Halifax shows.

The January rise also reversed December’s 0.5% fall, giving house price growth a strong start in the new year.

Meanwhile, the annual rate of house price growth edged higher to 1%, between January 2025 and January 2026, up from 0.4% in December.

Quarterly growth in the three months to January was effectively flat, rising by just 0.1%.

Amanda Bryden, head of mortgages at Halifax, said the “housing market entered 2026 on a steady footing,” with activity levels showing the market has stayed resilient despite the ups and downs of recent years.

The average price of a house has risen by 5.7%, or around £16,000, over the past three years, significantly lower than the growth seen during and just after the coronavirus pandemic.

House price growth between 2023 and 2026 was restricted as higher interest rates and stretched affordability pushed down demand and kept house price growth muted.

In contrast, the three years between 2020 and 2023 saw prices increase by almost 19%, or around £44,000, as buyers embraced the low cost of borrowing.

Despite house price growth being relatively low in the last three years, Bryden believes the market’s health is set to get better.

She said: “Broader economic conditions continue to provide some support. Wage growth has been outpacing property price inflation since late 2022, steadily improving underlying affordability. That’s a positive trend for buyers, and the long-term health of the market.

Affordability worsens as house prices rise

While rising house prices will be welcome news for those who already own a house, it is less good news for those who are trying to become homeowners.

With increasing prices, those attempting to get onto the housing ladder are having a more difficult time putting together enough savings for a deposit, and seeing more of their income being spent on mortgage payments.

However, Bryden says there are signs that affordability could increase this year, even while house prices shoot over the £300,000 milestone.

She said: “Affordability is still a challenge, but stronger wage growth and falling mortgage rates have helped relieve some of the pressure in recent years.

“We expect that improvement to continue in 2026, meaning that with the right support and advice, home ownership should become a realistic prospect for more would-be buyers.”

She added that while the headline numbers may be daunting for first-time buyers, most will be looking for smaller properties at a price point significantly lower than the average.

“Many locations offer far more accessible price points, especially in northern regions where homes can often be found for under £200,000.”

Regional house price performance differences deepen

Large price differences between different regions in the UK are not a new phenomenon, but they have become more pronounced in recent years as the divide between house prices in the north and south has deepened.

Northern regions and the devolved nations have consistently experienced strong house price growth as demand has remained high, while some regions in the south have seen price growth stall or even reverse.

The UK region that experienced the highest annual price growth was Northern Ireland, where prices increased by 5.9% in 2025, meaning the typical house there now costs £217,206.

Scotland also experienced high annual price growth of 5.4%, bringing the average price of a house in the nation to £221,711.

As for England, its northern regions and the Midlands were the only places where house prices grew in the past year.

The North West leads the way, as the average price of a house there increased by 2.1% to £244,329, while the North East saw prices increase by 1.2% to £181,198.

Not a single southern region saw the average price of a home increase in 2025.

The two worst-performing regions were the South West and South East, where average prices fell by 1.6%.

Greater London also suffered shrinking price growth, as the average house there is now 1.3% lower than it was a year ago, bringing it to £538,600.

Source: Halifax, 6 February

Average house prices started the year on an upward trend, raising hopes of a recovery, Nationwide data suggests.

The latest Nationwide House Price Index shows average house prices rose by 1% annually in January 2026, an improvement on the 0.6% recorded a month before.

Average house prices also rose 0.3% on a monthly basis after a decline in December, blamed on the aftermath of the Autumn Budget.

This puts the average UK house price at £270,873, Nationwide said.

Property values could rise further if affordability improves and interest rates are cut further.

Robert Gardner, Nationwide's chief economist, said: “The start of 2026 saw a slight pick-up in annual house price growth.

“Housing market activity also dipped at the end of 2025, most likely reflecting uncertainty around potential property tax changes ahead of the Budget.

“Nevertheless, the number of mortgages approved for house purchase remained close to the levels prevailing before the pandemic.

“Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained.”

The new year housing market

It’s been a different start to the year compared to 2025.

Homebuyers and sellers entered 2025 with a rush to beat changes to stamp duty thresholds.

The final months of 2025 were dominated by uncertainty about Autumn Budget tax rises. The only major change to property taxes in the end was the announcement of a mansion tax, which will be introduced in April 2028.

With the Budget out of the way, there is less uncertainty this year and more optimism as buyers hope for more interest rate cuts, which should mean cheaper mortgages.

Research suggests affordability constraints have eased over the past year, attributed to earnings growth outpacing house price growth and also a steady decline in mortgage rates. This has helped underpin buyer demand, the building society said.

A prospective first-time buyer earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 32% of their take-home pay – slightly above the long-run average of 30% and well below the recent high of 38% recorded in 2023, Nationwide found.

All parts of the UK, with the exception of Northern Ireland, saw an improvement in affordability over the past year.

For the second year running, London saw the largest improvement in affordability but remains the least affordable region by a significant margin.

Affordability pressures remain pronounced in the South of England, whilst in the North,

Yorkshire & The Humber and Scotland, mortgage payments as a share of take-home pay are slightly below their long-run average, Nationwide said.

Will house prices rise in 2026?

House price growth slowed towards the end of 2025 as the market adapted to higher stamp duty costs and stalled amid Autumn Budget uncertainty.

But there are hopes for more growth in 2026, with more interest rate cuts expected in 2026.

Gardner added: “Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year is maintained.”

Tom Bill, head of UK residential research at Knight Frank, said: “House prices edged higher as certainty following the Budget triggered a flurry of deals before Christmas.

“However, mortgage approvals in the same month were 9% below the five-year average, showing that demand is still fragile. The chances of two rate cuts this year have faded in recent weeks for reasons that include stronger-than-expected UK economic data, which underlines how prices and transaction levels will remain under pressure.

“The absence of political drama over the next few months would help confidence grow, but that might be wishful thinking.”

Coastal properties are often popular with retirees or those who want to escape the hustle and bustle of cities, but high house prices have been a deterrent for many.

However, this could be changing as fresh data reveals house prices dropped in some of the most popular seaside towns by as much as 6.9% in 2025.

Aberystwyth saw the biggest drop of 6.9%, with average prices sliding from £245,933 to £228,854.

This was followed by a drop in Tenby of 5.2%, with average prices falling from £220,673 to £209,122.

In fact, prices in 20 UK seaside spots fell by an average of 1% from £276,615 to £273,921 between November 2024 and November 2025, according to the analysis by property portal Property DriveBuy.

As well as Aberystwyth and Tenby, a number of other seaside locations in south east England suffered house price blows, Property DriveBuy found, including Hastings which experienced a drop of 4.5% from £253,440 to £242,112.

Average house prices in Bournemouth and Brighton fell by 3.8% (£323,774 to £311,416) and 2.4% (£417,876 to £407,919), respectively.

Steve Foreman, founder and chief executive officer of Property DriveBuy, said: “Seaside prices appear to have cooled following several years of exceptional demand starting during the coronavirus pandemic in 2020.

“However, these price drops do appear to be more of a correction than a long-term shift.

“As buyer confidence improves and mortgage rates continue to stabilise, we expect demand for seaside homes to stabilise.”

Credit: Property DriveBuy

Why did coastal locations struggle in 2025?

House prices in coastal areas tend to stay resilient because it’s harder for them geographically to expand, with large parts of their borders surrounded by the sea, limiting stock. Good transport links to other major centres can also prop up prices in seaside spots.

So why did so many seaside spots slide in 2025?

Foreman, from Property DriveBuy, said one of the causes was a “renewed pull towards city living” which has increased after the coronavirus pandemic, when large swathes of buyers fled urban centres for coastal locations.

“As employers increasingly encourage a return to the office, and with job opportunities still heavily concentrated in cities, coastal living is beginning to look less practical, especially for younger buyers without fully flexible working arrangements,” Foreman explained.

At the same time, older second-stepper buyers “who traditionally underpin coastal demand, have been more cautious in recent years”, Foreman said.

Higher mortgage costs, caused by higher interest rates, and economic uncertainty have also dampened appetite in coastal areas, locations people typically target when upsizing.

However, Foreman argued the greatest factor in falling coastal house prices has been the “changing makeup of coastal communities themselves”.

“In many areas, local residents have been gradually priced out of ownership, temporarily releasing stock that might otherwise have been absorbed by first-time buyers.

“That gap was quickly filled by investors converting homes into short-term holiday lets. Over time, this has disrupted the natural rhythm of the local housing market, reducing turnover and weakening demand. Ironically, the result has been less market activity and, in some cases, downward pressure on prices."

House prices in popular city and countryside locations rise

If lower property prices on the coast aren't enough to persuade you to make the move, you’ll likely have to fork out more to relocate to the major city and countryside spots.

Prices across some city and countryside locations went up by as much as 8.5% between November 2024 and November 2025, according to Property DriveBuy.

Cities in northern England and Scotland dominate the upper-end of the list.

Prices grew from £170,536 to £185,023 (8.5%) in Liverpool, followed by Sunderland where they jumped from £133,948 to £143,824 (7.4%).

The average price of a home in Bradford rose from £176,550 to £187,242 (6.1%) while prices in Glasgow and Edinburgh increased from £181,424 to £191,884 (5.8%) and £280,753 to £296,878 (5.7%), respectively.

Prices in just two of the cities fell over the 12 month window – London (-1.2%) and Birmingham (-0.6%).

The top countryside locations saw prices go up by an average of 2.3% in the 12 months to November, Property DriveBuy found.

In Alnwick, the average price jumped from £195,519 to £211,838 (8.3%) while in Bangor it rose from £206,955 to £222,919 (7.7%).

Prices in Lewes fell from £378,536 to £369,070 (2.5%) and in Tetbury, where home prices plummeted from £469,121 to £429,773 (8.4%).

“I’ve stopped paying into my Lifetime ISA now. I don't think it's worth it,” a friend explained. The rest of the group, mostly renters in their early 30s, nodded in support as she explained her plight – the property cap (which has been frozen at £450,000 since the Lifetime ISA launched in 2017) is becoming more and more restrictive if you want to buy in London. The increasing likelihood of paying an effective 6.25% penalty on your hard-earned savings if your dream home exceeds this threshold makes the account much less appealing – putting money elsewhere gives you more choice.

I remember discussing the Lifetime ISA (LISA) when it first launched, almost a decade ago, with a group of friends who were long term renters in the capital. It was replacing the Help to Buy ISA, and the Lifetime ISA seemed to be a welcome improvement.

Each tax year, you can save up to £4,000 in a Lifetime ISA and get a 25% (up to £1,000) boost from the government. With the Help to Buy ISA, which you can no longer open, you can pay in £200 a month and also get a 25% top up, but the overall maximum bonus is £3,000.

I ran the calculations – if you could afford to max out your Lifetime ISA for more than three tax years, you would end up with a greater bonus via the Lifetime ISA. Plus the 25% boost is paid into your account the following month, rather than needing to be claimed when you come to purchase, so you can benefit from compound interest (you can hold cash and/or stocks and shares in Lifetime ISA).

To get the Help to Buy ISA bonus, the purchase price of a property is capped at £250,000, or £450,000 in London. With the Lifetime ISA, it’s a blanket £450,000.

When the Lifetime ISA launched in April 2017, the average UK house price was £220,094, according to HM Land Registry. In London, the average was £482,779. But as of November 2025, the average UK house price is £271,188, and £553,258 in the capital.

While house prices have risen, the Lifetime ISA cap has failed to keep pace. If it had been uprated, the limit would have grown to £575,550 according to AJ Bell calculations in February 2025. This restricts prospective buyers who face fewer affordable options that fall within the Lifetime ISA boundaries.

Plus, bizarrely, the £450,000 cap doesn't align with first-time buyer's relief on stamp duty land tax (SDLT) – which applies on properties costing up to £500,000. As a first-time buyer you pay no SDLT on the first £300,000 then 5% on the portion from £300,001 to £500,000. Surely it’s time to uprate the Lifetime ISA property value limit to be at least in line with this relief.

How Lifetime ISA withdrawals work

Lifetime ISA withdrawal rules are stringent. You can access the cash penalty-free if you’re buying an “authorised” property (you’re buying a property costing £450,000 or less, with a mortgage, using a conveyancer or solicitor and you first paid into the Lifetime ISA at least one year ago) or if you’re 60 or older. Otherwise, unless you’re terminally ill with less than 12 months to live, you will be charged 25% on withdrawals.

Let’s say you put in £16,000 over the years. With the £4,000 bonus, you’d have £20,000, assuming no growth. You then want to buy a property for £500,000, so withdraw the entire pot. As this is just over the Lifetime ISA cap, you would pay a 25% withdrawal charge of £5,000 – leaving you with just £15,000. This works out at an effective 6.25% penalty on your savings.

A withdrawal charge is understandable given the 25% top up is applied within the tax year, but cutting it to 20% would mean HMRC can recoup the bonus if it’s not used to buy a first home. We don’t need an entirely new ISA product for that – the rate was cut to 20% during the coronavirus pandemic.

The rumoured Lifetime ISA replacement

In the 2025 Autumn Budget, chancellor Rachel Reeves announced the government will publish a consultation in early 2026, on the “implementation of a new, simpler ISA product to support first time buyers to buy a home”. It’ll be offered in place of the Lifetime ISA. It’s promising news – Lifetime ISA reform is long overdue. But HMRC this week suggested the consultation will focus on launching a new product which removes the retirement saving aspect of Lifetime ISAs and the withdrawal charge.

It seems the new product, reportedly due to launch from April 2028, will return to the Help to Buy ISA model, where the bonus is applied when the property is bought. This should “be cheaper” for the government, but potential homeowners would lose out on the “investment growth earned on the bonus during the years they save for their first house”, Rachel Vahey, head of public policy at AJ Bell, points out.

It’s not yet known whether the property value threshold will be changed. I really hope it is. If it remains frozen, the government would be ignoring the main problem with the Lifetime ISA and missing a huge opportunity to genuinely help first-time buyers get on the property ladder amid rising house prices.

I believe the Lifetime ISA is a great product for prospective homeowners, but it’s failing because the property cap hasn’t kept up with house price growth. First-time buyers are being restricted to fewer options as property prices rise, and the frozen threshold is undermining confidence in the product. Why would you commit to locking your savings for a deposit in a Lifetime ISA if you were likely to lose a chunk of the money you put in to buy your first home?

Fixing this flaw by uprating the limit is a fantastic opportunity for the government to win support from millennials and Generation Z. Launching a new product which doesn’t address the frozen threshold would just be a huge waste of time and taxpayers’ money.

Homemovers and first-time buyers alike looking for the ideal place to live in 2026 may increasingly find the best deal for lifestyle and property price potential in the North, according to new research.

Towns in Greater Manchester, in particular, feature heavily in the 2026 Best Places to Live Index, which identifies places with the perfect blend of value for money, natural beauty, good schools, jobs and a high quality of life for those looking to buy a house.

The annual league table ranks the best cities, towns and villages in England and Wales with more than 5,000 residents according to 18 separate criteria.

This includes proximity to National Parks and Areas of Outstanding Natural Beauty, air quality, crime figures, the closeness to good state schools and availability of high-paying jobs, transport and broadband connections.

The analysis, which ranked 1447 locations, is compiled by Garrington Property Finders, one of Britain’s largest independent property buying agents.

Jonathan Hopper, chief executive of Garrington, said: “The price of a typical family home rose in 16 of the top 20 locations in our 2026 ranking, but all offer a strong combination of excellent amenities, a high quality of life and good value for money compared to their regional market.

“Many buyers paused their moving plans in the latter part of 2025, but our team of experts across England and Wales is now seeing a surge in interest from people ready to make a move in 2026.

“With the Bank of England base interest rate back below 4%, mortgages have become more affordable and this gives would-be buyers greater freedom to pick a property that’s perfect for them.”

We look at the happiest places to live in the UK and what they cost in a separate article.

Best places to live in England in 2026

Marple, a picture-postcard town on the edge of the Peak District just nine miles from central Manchester, has taken the top spot as 2026’s best place to live, in a ranking of more than 1,400 communities across England and Wales.

Described as an “oasis of charm and calm”, Marple is understood to have been the inspiration for the name of Agatha Christie’s older lady sleuth. It is also where the house prices of family homes rose 7.6% in value last year.

A perennial high-achiever – having come fourth in the 2025 ranking – Marple is just 25 minutes from the heart of the city. Residents enjoy a strong community spirit, two brass bands, a neighbourhood cinema and lots of independent shops. The town also has miles of canal towpaths and wooded valleys that powered it to 18th place in the natural beauty category of the ranking.

At £517,119, a typical family home (defined as 1500 square feet) in the town costs well above the English national average. Yet even though family home prices there rose by almost 8% over the previous year – much faster than those in southern England – they remain competitive for a prime area of Greater Manchester, and Marple scooped 27th place in the property value for money category.

The North also secured second-place in the rankings of the best place to live in 2026 with Rawdon in West Yorkshire.

Just six miles from the centre of Leeds providing access to city amenities, the village came 95th in the natural beauty category – with sweeping landscapes and panoramic views – and represents good value after the price of an average family home dipped by 0.3% over the year to reach £451,094.

House price differences North and South

Average property prices in England rose by 1.4%, and by 1.5% in Wales, during the 12 months to October 2025, according to Land Registry house price index data. But these national averages of house prices mask huge regional variations and a narrowing of the gap between north and south.

Over the same 12-month period, the average London property fell in value by 2.4%. At the other end of the scale, average prices surged 5% in North East England and rose 3.1% in both the North West and in Yorkshire and the Humber.

However, Garrington’s analysts identified several prime locations that bucked their regional trends to become better value.

Sixth-placed Bowdon is one example. The prestigious village, also in Greater Manchester, came 37th in the schools, jobs and connectivity category of the ranking but was lifted by its slower property price increase.

Home to Premier League footballers and celebrities, and located in the prime ‘Golden Triangle’ between Manchester and Liverpool, Bowdon has become a touch more affordable after the price of a typical family home rose by a modest 1.3% to reach £639,321.

Garrington’s Hopper said: “The property maps of England and Wales were redrawn in 2025 as prices headed in opposite directions in different parts of the country. The north-south divide narrowed slightly as prices rose steadily in more affordable northern areas, and fell in the most expensive parts of London and the south.

“The big falls in prime central London values made headlines, but our analysis has revealed many other highly desirable areas across England and Wales where homes have become more affordable over the past year.”

Best place to live in southern England

The highest ranked place in southern England is St Albans in Hertfordshire. A city founded in Roman times, it also has a long history as an ideal place to live. It came fifth in the 2025 league table and has climbed to third in the 2026 ranking.

Just over 20 minutes by train from central London, St Albans is popular with wealthy commuters and has schools and property prices to match. At £895,411, the price of a typical family home in the city is the highest in the top 20 for 2026.

Best place to live in Wales

The highest ranked place in Wales is Penarth, a seaside town just three miles from the centre of Cardiff. Famed for its Art Deco pavilion and pebble beach, the town looks out across the waters of the Severn Estuary and clinched 34th place in the heritage and culture category of the ranking.

With a typical family home in the town costing £436,219 after average prices softened by 4.4% over the past year, Penarth has become significantly better value and ranks 113th overall for 2026.

All of the 1447 cities, towns and villages selected for the 2026 ranking score well in at least one category. Garrington's has an interactive search tool to pinpoint places that offer more of the things that matter most to homemovers.

The London property market has historically been attractive for many reasons, in particular for its potential for long-term growth and demand.

But while house price growth across the UK has stalled, London has probably seen the biggest decline.

House prices in the city stuttered between February 2016 and February 2026, growing just 10% compared to 41% across the UK, according to the latest Land Registry data.

The London housing market has struggled to continue its upward trend following the 2008 financial crash, and was then hit by the coronavirus pandemic and a fiscally turbulent 2025.

So much so are the struggles in the capital, it has replaced the North East of England as the region where homeowners are most likely to sell for less than they paid, according to recent Hamptons research. In 2025, 14.8% of Londoners sold their property for less than they bought it for, the estate agent found.

Could London’s fortunes be changing any time soon and will it continue to attract buyers and property investors?

Will London house prices rise in 2026?

The average house price in London is £542,304 – 102% higher than the UK average of £267,957.

But prices across the capital have languished in recent years. In fact in 2025, they fell by 1.8%, Land Registry data shows.

Things aren’t expected to turn positive over the near-term either, according to Savills, which expects house prices to flatline in 2026.

However, the estate agent said the market will turn positive in 2027 and continue this trend until the end of the decade. Cumulatively, it forecasts London house prices will grow by 13.6% between 2026 and 2030.

Credit: ONS, April 2026

How is the Iran conflict affecting the market?

The US-Israeli attacks on Iran on 28 February and the ongoing tensions since have thrown the UK housing market into flux.

The average two-year fixed-rate mortgage was 5.81% as of 24 April, up from 4.83% on 2 March, according to data firm Moneyfacts. However, this is a fall from a high of 5.90% on 12 April.

London has not been immune from the fallout.

The latest Royal Institution of Chartered Surveyors (RICS) report for March reveals estate agents and surveyors in London were more sceptical about house price growth in the capital compared to the February report.

Meanwhile, a number expressed concerns over future sales activity in what was an “already fragile” market prior to the tensions in the Middle East.

Tom Bill, head of UK residential research at estate agent Knight Frank, said house prices in the capital “will come under pressure” over the next few months as buyers’ budgets are squeezed by higher mortgage rates and with property prices significantly higher than the UK average.

However, he said he could “see a case” for interest rates to be cut later in the year which would see activity in the market grow. This could push property prices up.

He said: “You can see a case for rate cuts coming back onto the table for the Bank of England, but…for large parts of this year I imagine it [the BoE] will be holding steady in terms of where the bank rate is.”

Meanwhile, Lucian Cook, head of residential research at Savills, said tensions in the Middle East could “enhance the UK’s safe haven credentials – especially those of an attractively priced prime central London market”.

Though this needs to be put in the context of a higher tax burden which is “likely to temper any impact on values”, he added.

Why have London house prices stagnated since 2016?

David Fell, lead analyst at estate agents Hamptons, said London house prices started shooting up in the spring of 2009 following the 2008 financial crisis, but growth fizzled out by the mid 2010s and prices haven’t picked up since.

He said the large-scale sale of flats, which are generally cheaper than houses, have kept overall house prices suppressed since the start of 2025.

“Around 60% of sales last year in London were flats and that's weighed down on average London prices,” Fell explained.

This trend of lukewarm growth in flat prices pushing overall property prices down has been rumbling on since 2016.

The average price of all London properties rose from £490,055 to £542,304 (10%) between February 2016 and February 2026, according to the most recent Land Registry data.

But flats and maisonettes have gone up in price by just 0.5% (£418,667 to £420,635) over the same period.

Indeed, flat and maisonette prices fell by 7% between February 2022 (£455,139) and February 2026 (£420,635).

What does it all mean for buyers and renters?

For buyers, London still remains an expensive option, particularly for first time buyers who face prices significantly higher than the UK average.

But for those drawn to the capital, now could be a good time to buy before prices start creeping up from 2027.

For renters, it’s worth noting that rental costs have surged in recent years, but growth across the UK was lowest in London in the 12 months to March 2026 (1.7%).

Renters may face higher costs after 2026 though, as more landlords sell up due to regulatory changes and tax changes such as the Renters’ Rights Act and the hike to property income tax rates in April 2027, according to Bill, from Knight Frank.

Meanwhile, Bill said the estate agent had seen an uplift in people returning from the Middle East and looking for short-term rentals, which could push up demand.

Is London property still worth investing in?

There is a mixed approach for investors. Some are selling due to costs and tax pressures, whereas others remain invested as London continues to show signs of resilience and rental demand.

According to Barratt Homes, there are 2.7 million private renters in London, providing opportunities for landlords.

London also remains the number one international city for wealthy Gulf investors, according to the latest Gulf Cooperation Council Investment Barometer from AlRayan Bank.

Its survey of 150 high net worth individuals from Saudi Arabia, Qatar and the UAE with a minimum £10 million in wealth, found 29% invested in London property in 12 months ending September 2025 ahead of New York (23%), Paris (23%), Los Angeles (22%) and Tokyo (21%).

James Mulvaney, head of digital at property finance brokers Clifton Private Finance, said despite the challenges facing landlords, there was also potential for growth for those applying the Buy, Refurbish, Refinance, Rent (BRRR) method.

In any case, despite its challenges, it looks like London will continue its resilient streak, attracting buyers, as well as investors both foreign and domestic as rental yields could deliver a return on investment, with the average rental yield in London ranging between 5% and 6%.

However, some landlords may take a more cautious approach with the changes laid out in the Renters’ Rights Act, including limiting advance rental payments to one month and giving tenants the right to request permission for a pet, which took effect from May this year.

The areas where homes are most likely to have risen in value in 2025 have been revealed.

Property website Zoopla assessed how much property prices rose across all UK local authorities in 2025, listing one area in each region where the highest percentage of homes relative to the total amount increased in value.

Across Scotland, Renfrewshire was the authority where the highest number of homes increased in value. There, 95% of the 47,000 properties went up in value, with the average price rise worth £12,500.

Chorley, in North West England, was second on the list with 88% of the 36,900 homes rising in value across 2025, by an average of £11,500.

Wrexham, third on the list, was the local authority where the highest number of homes increased in value across Wales.

Home to the football team owned by Hollywood actors Ryan Reynolds and Rob McElhenney, 79% of its 37,600 homes went up in price in 2025 (averaging £10,400).

Northumberland (North East), Calderdale (Yorkshire and the Humber) and Dudley (West Midlands) were fourth to sixth on the list. Across these three local authorities, the percentage of homes that rose in value was 78%, 77% and 77%, respectively.

Credit: Zoopla

We look at the best UK regions to be a buy-to-let landlord in another article.

House prices most likely to have risen in the northern regions in 2025

Houses were most likely to have increased in value across the north of England, Scotland and Northern Ireland in 2025, according to Zoopla’s research.

In Northern Ireland, 94% (716,100) of properties rose in price by an average of £14,200, while just 3% (26,400) fell in value (by an average of £12,200).

In Scotland, 73% of homes (1,949,800) went up in value and by an average of £10,400. Conversely, 17% (474,600) dropped in price to an average loss of £7,700.

Across the North West England region, 72% of properties (2,451,100) increased in value, with the average price rise worth £9,700. There, 15% of homes (513,800) dropped in value to the average tune of £7,500.

In the North East of England, 67% (837,700) of properties saw their prices go up by an average of £6,600, versus 19% (229,500) which went down by an average of £4,800.

In South West England, South East England and London, the proportion of homes that fell in value in 2025 was greater than the percentage that rose across these regions.

The findings largely mirror what other major house price indices (HPIs) have been noting – that house price growth was greater in the north of England, Scotland and Northern Ireland in 2025, while in southern England and the capital it was much weaker.

Across the whole of the UK, around 15.2 million homes increased in value, and by an average of £9,900, in 2025, Zoopla said. Including all 30 million UK homes, there was an average increase in value of £2,300.

Where will house prices rise the most in value in 2026?

Earlier this month, Zoopla highlighted the top 10 UK locations with the most potential for house price growth in 2026.

The property portal based its predictions on how affordable homes are, how quickly they are selling, whether prices are being cut to attract demand and how many properties have been on the market for longer than six months across different areas in the UK.

The factors were assessed across 120 UK postal areas to create overall rankings of the places with the best prospects for house price growth in 2026.

Nine areas in the top 10 list are based in Scotland, with Motherwell, Glasgow and Paisley in the top three. Falkirk, Kirkcaldy and Edinburgh also feature.

The one area in the top 10 list outside Scotland was Wigan in the North West of England.

Zoopla said one of the major reasons so many postal areas in Scotland were forecast to see strong house price inflation in 2026 was due to the large number of homes on offer which could put sellers in a stronger position.

House asking prices shot up by the highest ever margin on Rightmove between December and January as the market rebounded from a Christmas lull and pre-Budget uncertainty.

The average asking price on the property website jumped month-on-month by £9,893 from £358,138 to £368,031 (2.8%).

The hike is the largest December to January jump since Rightmove launched its House Price Index (HPI) 25 years ago and the biggest month-on-month rise of any month since June 2015.

The property website said average asking prices are now 0.5% higher compared to January 2025.

However, some areas of the UK didn’t see asking prices rise in the month to January, with the East Midlands and Scotland experiencing falls.

Rightmove also said the number of homes on the market is at its highest January level since 2014, which could put downward pressure on prices.

Meanwhile, Colleen Babcock, property expert at Rightmove, advised people against overpricing their homes as it could make them harder to sell.

“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.

Buyer demand rises post-Christmas

Rightmove said it received the highest number of Boxing Day website visits ever at Christmas. Meanwhile, in the two weeks after Christmas Day, buyer demand rose by 57% compared to the two weeks before 25 December.

Rightmove measures buyer demand based on the number of people contacting estate agents to enquire about homes for sale.

It said the buyer demand at the beginning of 2026 was weaker than 2025, when buyers flooded the market ahead of an end to the temporary increase to stamp duty thresholds, but was in line with 2024 figures.

Babcock said: “A record number of visits to Rightmove on Boxing Day and a big bounce in activity following a quieter festive period have set the tone for a positive start to the year.”

What’s likely to happen to house prices in 2026?

The housing market suffered a stormy 2025 as demand dropped after stamp duty thresholds dropped in the spring and the market stayed cautious pre-Budget.

Higher mortgage rates have also put a dampener on prices. Forecasts over how much house prices will rise vary, but estate agency Hamptons expects them to grow modestly by 2.5% while lender Halifax has predicted they will increase up to 3%.

Separate research published recently by Hamptons also shows that in 2025, nearly 15% of Londoners sold their home for less than they bought it for, the highest proportion in England and Wales and above the national average of 8.7%.

There are signs the market is starting to rebound though.

The most recent Residential Market Survey for December from the Royal Institution of Chartered Surveyors (RICS) shows expectations for home sales and house prices have turned more positive following months of uncertainty.

The Bank of England (BoE) cut base rate from 4% to 3.75% in December too, which has led to a number of lenders including Nationwide and HSBC lowering their mortgage rates in recent weeks.

Some parts of the UK could experience above-average house price growth in 2026 too.

Reports differ, but largely suggest property values will rise the most in Northern Ireland, Scotland and Northern England.

Conversely, London and Southern England, where house prices are currently the highest, are expected to grow the least.

Sentiment appears to be improving in the property market but the mood isn’t translating into actual sales yet, research suggests.

The latest Residential Market Survey for December from the Royal Institution of Chartered Surveyors (RICS) shows expectations for home sales and house prices have turned more positive following months of uncertainty.

It comes as the housing market stalled in the final months of the year amid uncertainty about tax rises in the Autumn Budget.

The RICS 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 November report suggested confidence remained low in the aftermath of the fiscal update.

But since then, homebuyer budgets have been boosted by interest rate cuts and falling mortgage rates.

The RICS report suggests that while surveyors are negative about the current market, there are hopes of change in the coming months.

In particular, sales expectations over the next three months rose to the highest level in more than a year.

But current buyer demand and agreed sales remain negative, according to the report.

Hope for the housing market

House price growth slowed last year as the market adapted to higher stamp duty costs and navigated Autumn Budget uncertainty.

There are hopes that now that the Budget is out the way and interest rates may be cut further, the housing market may finally catch a break.

Supply conditions have stabilised, according to the RICS report.

This hasn’t translated into home purchases yet though.

Buyer demand and agreed sales remained in negative territory in December.

New buyer enquiries registered a net balance of -24%, while agreed sales came in at -19%. However, both measures improved slightly on the previous month, signalling that the downturn is losing momentum, RICS said.

Meanwhile, new vendor instructions flattened to a net balance of 0%, ending several months of decline.

The report cautioned that while this suggests the market has stopped deteriorating, low appraisal activity indicates that any meaningful increase in stock will take time to materialise.

In some good news, sales expectations over the next three months rose to +22% – the strongest reading since October 2024.

Prospects for the property market also improve with a longer term view.

Looking 12 months ahead, a net balance of +34% of respondents expecting sales volumes to rise – more than double the level seen in November.

Surveyors highlighted easing interest rate expectations and the clearing of Budget-related uncertainty as key drivers behind the turnaround in mood.

Tarrant Parsons, RICS head of market research and analysis, said: “The UK residential market remains in a prolonged soft patch, with December’s survey recording a sixth consecutive month of negative momentum in buyer enquiries. That said, there are tentative signs of a shift in sentiment beneath the surface.

“Near-term sales expectations have strengthened, and the 12-month outlook has edged into more positive territory. The key test for 2026 will be whether borrowing costs ease on a sustained basis. If so, this could provide the catalyst needed to drive a recovery in buyer demand.”

Will house prices rise in 2026?

The days of double digital house price gains appear to be over.

House price growth slowed towards the end of 2025.

Forecasts vary, with property website Zoopla predicting that house price growth will be slow in 2026 at 1.5%, while Halifax has forecast up to 3%.

Research by Hamptons also shows that in 2025, 14.8% of Londoners sold their home for less than they bought it for, the highest proportion in England and Wales and above the national average of 8.7%.

Respondents to the RICS report suggest house prices continue to edge down nationally, with a net balance of -14%, but the trend is clearly moderating.

There are regionally differences, with prices falling more sharply in London and the South East, while Scotland and Northern Ireland continue to record growth.

Looking ahead, short-term price expectations have improved to near-flat levels, while +35% of respondents now expect prices to rise over the next year – the most upbeat outlook since late 2024.

Commenting on the report, Tom Bill, head of UK residential research at Knight Frank, said: “The renewed confidence seen in recent weeks underlines the rule that the less a government intervenes in the housing market, the closer it operates to full capacity.

“The combination of clarity around taxation and the prospect of further rate cuts means demand in the first weeks of January has been stronger than normal.

"That doesn’t mean the market is now on an upwards trajectory and domestic political risks could still undermine sentiment over the next six months. For now, the absence of bad news means that some of the demand that became pent up last year is being released and we expect UK prices to grow by 3% this year.”

The 10 locations where UK house prices are predicted to rise the most in 2026 have been revealed – and one nation has stolen the spotlight.

The latest research by Zoopla shows nine hotspots in Scotland are expected to see a house price surge in 2026 and will record the greatest growth this year, with just one location outside the country making the top 10 list.

The property portal assessed how affordable homes are, how quickly they are selling, whether prices are being cut to attract demand and how many properties have been on the market for longer than six months.

These factors were assessed across 120 UK postal areas to create an overall ranking of the places with the best prospects for house price growth in 2026.

Scotland to lead the way for house price growth

Motherwell is forecast to record the strongest house price growth in 2026 after experiencing 3.4% year-on-year growth in 2025.

Glasgow, Paisley and Falkirk are second, third and fourth on the UK top 10 list, after seeing growth of 3%, 3.4% and 4.2%, respectively, last year.

Edinburgh, Perth and Inverness are also on Zoopla’s top 10 list. Wigan, which saw house prices rise by 3% in 2025, is the only location outside Scotland in the top 10 list.

Zoopla said one major reason it is expecting property prices to rise significantly in these areas is due to the abundance of stock on offer. This will lead to fewer asking price reductions, it said.

Meanwhile, the average current house price across all 10 locations forecast to show the strongest price growth in 2026 is under £252,000, lower than the £269,862 UK average, based on Land Registry data. A lower starting point leaves house prices greater room to grow.

Credit: Zoopla

Where will house prices rise the most in England and Wales?

Wigan is the English location where Zoopla expects property prices to grow the most this year.

Then follows Liverpool, Stoke-on-Trent and Wolverhampton. All four of these areas saw average house prices rise by at least 2.8% in 2025.

The North West dominates the top 10 list of locations where Zoopla thinks prices will rise the most in England in 2025 – six locations from the region feature on the list.

The other four areas are based in the Midlands and North East of England.

Meanwhile, areas in southern England and London have the lowest prospects for house price growth, according to Zoopla.

All 10 bottom-ranked locations were in the South East, South West and London.

West Central London is expected to see the lowest rise in house prices across the 120 postal areas Zoopla ranked, after showing a 1.8% drop in 2025.

West London, East Central London and South West London were the next lowest-ranked locations.

Zoopla said it is expecting house price growth across southern England in 2026 to be subdued, with buyers remaining price sensitive despite a greater supply of homes.

Across Wales, Zoopla is predicting house prices will rise the most in the capital Cardiff, where prices went up by 2.1% last year.

Newport and Shrewsbury are also expected to record strong growth, as well as Llandudno, Swansea and Llandrindod Wells.

Credit: Zoopla

The average UK property price in December fell to its lowest level since summer, as growth slowed toward the end of 2025.

House prices dropped by 0.6% between November and December, from £299,544 to £297,755, according to Halifax’s latest house price index.

The average UK property price is the lowest it has been since June 2025, based on the lender’s index.

In the 12 months to December, annual house price growth slowed to 0.3%, down from 0.6% in the year to November, carrying on a downward trend since the start of 2025.

Annual house price growth in the year to January 2025 was 2.9%.

Amanda Bryden, head of mortgages at Halifax, was positive about the housing market in 2026 despite the December downturn.

“While December’s monthly fall in prices was likely related to uncertainty in the latter part of the year, this should now be starting to unwind,” she said.

“Further, mortgage rates are already reducing following the latest Base Rate cut and there are an increasing number of lending options available for those borrowing at a higher loan-to-value.”

Bryden added the house price to income ratio was at its lowest level in over a decade in December.

It comes after the housing market suffered a turbulent year in 2025, with the run up to the end of the stamp duty tax break in spring seeing a rush of transactions, followed by a slowdown in activity after the new regime came into effect.

A usual summer uptick was short-lived, caused by speculation over what could be announced in the Budget, as mortgage approvals fell in October and November.

Alice Haine, personal finance analyst at online investment service Bestinvest by Evelyn Partners, said: “The softer December data does not tell the full story across 2025, with the housing market proving surprisingly resilient despite a myriad of challenges.”

What's happening in the UK housing market?

Across the UK, Northern Ireland continues to show the strongest house price growth, year-on-year, according to Halifax’s latest index.

Prices in the nation went up by 7.5% on average in the 12 months to December, with a typical home there costing £221,062.

Scotland saw steady property price growth, recording a rise of 3.9% over the same time period. Buyers there can expect to pay £217,775 on average.

Wales saw prices rise by 1.6% over the year with the average cost of a home £230,233.

In England, the north east was the region that had the highest annual growth, with average prices increasing by 3.5% to £181,798. Then followed the north west which saw growth of 2.8%, taking the average house price to £245,323.

Three English regions saw property prices fall in the 12 months to December, according to Halifax – eastern England, greater London and the south east.

Property prices there dipped by 0.8% (£333,617), 1.3% (£539,086) and 0.9% (£386,692), respectively.

The south west of England recorded growth of just 0.1% over the year, with the average property price there now £306,618.

Annual house price growth almost ground to a halt in 2025, although the market remained ‘resilient’ despite higher mortgage costs, according to Nationwide.

UK property prices rose by just 0.6% in the 12 months to December 2025, the major lender said, with the average home valued at £271,068.

The modest rise is the slowest in annual house prices since April 2024, Nationwide said.

Average house prices also slumped by 0.4% month on month, falling from £272,998 in November.

In the 12 months to December, average house prices grew in all UK regions apart from East Anglia where they fell by 0.8%. Prices in Northern Ireland increased by 9.7%.

Robert Gardner, chief economist at Nationwide, said the housing market remained ‘resilient’ in 2025 despite slowing at the end of the year.

“Even though consumer sentiment was relatively subdued, with households reluctant to spend and mortgage rates around three times their post pandemic lows, mortgage approvals remained near pre-Covid levels,” Gardner added.

Gardner said changes to stamp duty thresholds in April created volatility throughout the spring and summer as activity spiked in March, but demand ‘held up well’ across 2025.

We look at which house price index is the best in another article.

Where did UK house prices rise the most and least?

Although the overall picture showed modest house price growth in the 12 months to December 2025, some regions saw sharp increases in property values, Nationwide said.

Prices in Northern Ireland went up by 9.7%, outpacing the rest of the UK considerably. The average cost of a property there was £216,919.

The north west of England saw house price growth of 3.5% with the average property value standing at £225,665 in December.

House prices in London, south west England and outer south east England recorded more modest growth of 0.7%, 0.5% and 0.1%, respectively. The average cost of a property in the three regions was £529,372, £308,228 and £336,561.

East Anglia was the only region where house prices fell, experiencing a 0.8% drop (£269,912). This was the first regional annual decline since the second quarter of 2024, Nationwide said, when East Anglia house prices fell by 0.8%.

Credit: Nationwide

Flat prices continue to lag

Annual flat price growth continued its negative trend, Nationwide said. The property type recorded a year-on-year decline of 0.9% in the 12 months to December.

Conversely, semi-detached, detached and terraced properties recorded annual growth of 2.4%, 2.2% and 1.8%.

Over the last 10 years, the price of a typical flat has increased by 18%, less than half the 41% experienced by terraced houses. Nationwide said this is in part due to London holding a greater proportion of flats, a region which has seen slower property price growth over the past decade.

Gardner said: “The underperformance of flats (and London more generally) may in part be a function of the change in demand seen during the pandemic.

“This resulted in a shift in preferences towards properties that offered more space, which has only partially unwound.

“In addition, the increased costs of maintenance, ground rents and service charges are also likely to have impacted buyer sentiment towards flats in recent years.”

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The 10 areas in the UK where house prices grew the most in 2025 have been revealed – as have the locations where prices fell by up to 8.9%.

Plymouth topped the list of housing hotspots where property values went up the most in the UK between October 2024 and October 2025, according to Lloyds Bank.

The average home value across the major port city in Devon rose from £247,579 to £278,808 – growth of 12.6%, or £31,229.

Stafford in the West Midlands came next, with the average house price there jumping from £286,732 to £321,248 – a 12% (£34,516) increase.

Wigan was third, with the North West town’s average property price spiking by 10.5% (£23,740) from £225,822 to £249,562.

Eight out of the top 10 locations where house prices grew the most in the year to October 2025 were in middle or northern England and Scotland, according to Lloyds.

Woking, in the South East – where house prices have mostly risen only slightly or fallen over the last year – recorded average growth of 8.1% (£42,046).

Where did house prices fall the most in 2025?

The South East of England dominated the list of towns and cities where the average value of homes fell the most in the year to October 2025, Lloyds said.

Crawley topped the list, with average home values there dropping by 8.9% (£36,317) from £408,519 to £372,202.

High Wycombe was next – average house prices there fell by 7.4% (£34,994) from £471,373 to £436,379.

Brighton, also in the South East of England, was eighth on the list, with average property prices dropping from £425,129 to £404,874 – a £20,254 or 4.8% dive.

Chester in the North West, Solihull and Worcester in the West Midlands and Cardiff, Wales, also featured in the list of 10 locations where average home values went down the most.

Amanda Bryden, head of mortgages at Lloyds, said: “If you’ve got your heart set on a particular location, it’s worth taking time out to do some research and see what’s happening with prices there, as swings in value at a local level can make a big difference to how much you may need for a deposit, stamp duty or wider moving costs.”

Which UK regions saw house prices rise – and where did they fall?

While some towns and cities saw average house prices falling, London was the only region across the UK where prices fell in the 12 months to October, according to Lloyds.

The average property price in the capital fell by 0.1% (£341) from £574,855 to £574,514.

Average house values across South East England grew, but by a mere 0.8%, from £449,454 to £452,961 (£3,507). Property prices in the North East also grew by a paltry 0.8% (£1,787).

Northern Ireland, Scotland and the North West experienced the biggest jump in property prices, with respective increases of 5.8% (£13,255), 3.7% (£9,302) and 3.7% (£9,933).

Average regional home values at the end of October 2025, according to Lloyds, were highest in London, then the South East and East of England.

The average property price across the UK was £365,110.

Looking ahead to 2026, Mary-Lou Press, president of Propertymark, the trade body for estate agents, said lower inflation and falling mortgage rates could lead to house price growth across the UK.

“Although no two mortgage agreements are the same, many people will be typically around £150 better off per month when compared to only 12 months ago,” Press said.

Press added the introduction of the Planning and Infrastructure Act, which received Royal Assent on 18 December, would help the government meet its target of building 1.5 million homes across England by 2029.

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Brits moved home at the highest rate for three years in 2025, but this frenetic buying and selling activity failed to translate into higher prices, according to the latest Zoopla house price index.

And house prices are expected to prove only slightly stronger in 2026, with a modest increase predicted by the online property listing firm.

There were 9% more home moves over 2025 than in 2024, by Zoopla’s calculations, despite uncertainty around the Autumn Budget hitting sales agreed in the last quarter of the year.

Stability in mortgage rates and stronger growth in household incomes encouraged more people to up sticks, with the market on track for 1.2 million transactions over 2025. This is in line with the 10-year average.

Richard Donnell, executive director at Zoopla, said: “2025 has been a strong year for home moves but the Budget hit activity in the final months of the year and saw many moving decisions put on hold. Now the uncertainty has lifted, we expect a stronger than usual start to 2026 as buyers return to the market.”

However property buyers continued to drive hard bargains in 2025 and the three-year-high for sales activity did not convert into higher prices for home sellers.

Average UK house price

Average UK house prices now stand at £270,300, according to Zoopla. This is 1.1% higher than a year ago, but lower than the 1.9% increase over 2024 and well below the 3.8% annual average over the last 10 years.

The market is locked in a north-south divide in price growth, driven by affordability and big variations in the cost of buying a home.

House prices are rising fastest in the North West (2.9%) and Northern Ireland (6.7%). Meanwhile prices are falling across southern regions of England – and by up to -0.6% in London where house prices and stamp duty costs are highest.

Donnell said: “It is important that sellers remain realistic on pricing to secure sales in 2026, especially across southern England. Homeowners looking to move in the year ahead should understand the value of their home and what they can afford before starting their property search.”

Regional differences in property prices

Sellers in the Scottish Borders are enjoying the highest price increases, with the TD postal area (Tweeddale) at 4.7%, followed by Oldham (OL, 4.4%), Kirkcaldy (KY, 4.2%) and Falkirk (FK, 4.2%).

However it is more of a buyers’ market across southern England, particularly in coastal areas where the extra tax on second homes and a return to office working is impacting demand.

House prices are 2.4% down in the Truro (TR) postal area, as well as Torquay (TQ, -1.9%) and Bournemouth (BH, -1.8%).

First-time buyers drive increase in sales

More and cheaper mortgages mean first-time buyers have been a huge driving force in the 2025 house buying market, with their numbers on track to be 20% higher over the year, Zoopla said.

First-time buyers will account for almost two in five home purchases (39% of sales) in 2025, and will be the largest group of home buyers. They are followed by existing homeowners using a mortgage (33%), cash buyers (21%) and landlords buying with a mortgage (7%).

Polly Ogden Duffy, managing director at estate agents John D Wood & Co said: “First time buyers drive every part of the property market. When they kick-start activity at the entry level, it creates momentum throughout the entire system, allowing chains to form and transactions to progress across the country.

“With a continued shortage of rental homes pushing rents to record highs, buying is increasingly the more affordable option for many households – provided they can pass affordability checks and secure a mortgage. That’s why the recent easing of affordability criteria is such a positive step.”

Yet while first-time buyers can borrow more, this doesn't mean they are buying higher value homes.

Zoopla data on what first-time buyers are looking to buy using online listings shows they are seeking to spend more in typically cheaper regional markets, by up to 5% compared to a year ago. However, in London they are looking to buy homes that are 3% cheaper than a year ago, reflecting higher stamp duty costs with prices flat across southern England.

Forecasts for the housing market in 2026

Zoopla expects average UK house prices to increase by 1.5% over 2026. This, it said, will be led by a stronger than usual start to 2026 due to a release of pent-up demand as buyers return to the market having delayed decisions in the run-up to the Budget.

Across the Midlands, northern England, Scotland and Northern Ireland in 2026, house prices are expected to continue to rise at an above-average pace of more than 2.5%.

Lower house prices in northern England and Scotland mean better buyer affordability and higher rate of house price inflation. Zoopla expects this north-south divide in price inflation to continue over 2026.

Zoopla is also predicting an annual average house price increase of 2.1% a year between 2027 and 2029 as housing affordability continues to steadily reset and supports the number of sales.

Donnell, executive director at Zoopla, said: “The appetite to move home remains strong but affordability remains a constraint for those buying their first home or looking to trade-up to a larger home which will keep prices in check. There remains plenty of homes for sale, which will boost buyer choice as we start the new year.”

The housing market is in for a positive 2026 following a slower second half of 2025, according to the latest House Price Index (HPI) from Rightmove.

Property asking prices could rise by 2% next year due to a drop in interest rates, a high number of homes for sale and a market rebound post-Budget.

The property portal is predicting the Boxing Day bounce to be larger than usual on its platform, as many who paused their plans in anticipation of the Budget rejoin the market.

A recent survey of 10,000 potential movers by Rightmove found nearly one in five were waiting for the outcome of the annual fiscal event before making next steps.

Separate data from the website suggests the premium housing market in London is already showing positive signs post-Budget – the number of new sellers coming onto the upper-end of the market was up by 24% in the week after the Budget, compared to the week before.

Rightmove said the number of homes for sale on its platform being at a decade-high level, as well as falling mortgage rates would also lead to a surge in asking prices across 2026.

Colleen Babcock, property expert at Rightmove, said: “In the second half of 2025, uncertainty caused by rumours of property tax changes in November’s Budget swirled, some from as early as August.

“This had an impact on pricing and activity, as sellers tried to entice nervous buyers. The market will soon benefit from the traditional boost in home-moving activity from Boxing Day.”

Asking prices drop in December

Month-on-month, asking prices fell by 1.8% between November and December, from £364,833 to £358,138, according to Rightmove. This follows the same percentage drop between October and November, when prices sank from £371,422 to £364,833.

Prices commonly fall in December, in part due to the busy Christmas period, but Rightmove said this year’s percentage decrease was larger than the 10-year average of 1.4%.

Average asking prices across England, Wales and Scotland end 2025 0.6% lower than December 2024 (-£2,059).

Some regions saw growth annually, however – prices in the North West of England rose by 2.6% year-on-year, while the West Midlands recorded growth of 1.3%. Prices in the East Midlands and Yorkshire and the Humber increased by 0.8% and 0.7% over the 12-month period, respectively.

Prices fell considerably across the south of England between 2024 and 2025, with the South West and South East experiencing 2.7% drops. Asking price growth in London flatlined.

Could cheaper mortgage costs be on the way?

Mortgage holders have been gritting their teeth since 2022 when interest rates started rising due to soaring inflation, caused in part by strong global demand for goods as well as higher energy and fuel prices.

The average rate for a two-year fixed residential mortgage peaked at 6.86% in July 2023, from 2.52% in July 2021, according to Moneyfacts. Rates have fallen since then, with the average rate on a two-year fix 4.84% as of 12 December.

The Bank of England base rate is likely to fall lower in 2026.

In its November Monetary Policy Report, the Bank of England’s Monetary Policy Committee (MPC) projected inflation to slow to 3.2% by March 2026. In October it stood at 3.6%.

Meanwhile the MPC forecasts the base rate will fall from a current level of 4% to 3.5% by the end of 2026.

The market is widely expecting the base rate to be lowered by 25 basis points to 3.75% when the MPC next meets on 18 December.

Nick Mendes, mortgage technical manager at broker John Charcol, said: “Looking ahead to 2026, the direction of travel for mortgage costs is likely to be lower, but the pace of improvement should be viewed as gradual rather than dramatic.

“That said, mortgage rates will not fall in a straight line and will remain sensitive to inflation data, wage growth and how confident markets are that rate cuts will stick.”

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Annual house price growth hit its lowest level since March 2024 last month as uncertainty about the the Autumn Budget weighed on the property market.

The latest Halifax House Price Index shows Autumn Budget speculation kept property value growth down across the UK, while the south of England saw declines.

Average house price growth was flat across the UK on a monthly basis and slowed annually from 1.9% in October to 0.7% in November, according to Halifax.

This puts average UK house prices at £299,892.

The data coincides with the build-up to the Autumn Budget when many homebuyers and sellers are reported to have paused activity due to rumours about changes to stamp duty and other property taxes.

Amanda Bryden, head of mortgages at Halifax, viewed the figures positively.

“This consistency in average prices reflects what has been one of the most stable years for the housing market over the last decade. Even with the changes to stamp duty back in spring and some uncertainty ahead of the Autumn Budget, property values have remained steady," she said.

“While slower growth may disappoint some existing homeowners, it’s welcome news for first-time buyers. Comparing property prices to average incomes, affordability is now at its strongest since late 2015. Taking into account today’s higher interest rates, mortgage costs as a share of income are at their lowest level in around three years.”

What is happening in the UK housing market?

It has been a tense couple of months for the housing market. Demand has been hit by Autumn Budget speculation since September. This appears to have had the biggest impact in the south of England.

In London prices fell by 1.0%, the South East by 0.3% and Eastern England by 0.1%.

A different picture emerges in the rest of the UK. Northern Ireland remained the strongest performing nation or region in the UK, with average property prices rising by 8.9% annually.

Scotland recorded annual price growth of 3.7% in November, while average values in Wales were up 1.9%.

In England, the North West recorded the highest annual growth rate, with property prices rising by 3.2%, followed by the North East with growth of 2.9%

Will house prices rise in 2026?

It’s been a stop-start year for house prices in 2025. Values were boosted by a rush to beat the drop in stamp duty thresholds in April but there has been a slowdown since September ahead of the Autumn Budget.

Nationally, house prices are still growing albeit at a regional rate. But there are regional differences, with the south of England dragging prices down. Price dips in the south may also be exacerbated by the mansion tax that will be introduced in April 2028.

For now though, estate agents and analysts appear hopeful that with the Autumn Budget out the way and expectations of an interest rate cut before Christmas, the housing market could be set for a boost.

Bryden added: “Looking ahead, with market activity steady and expectations of further interest rate reductions to come, we anticipate property prices will continue to grow gradually into 2026.”

Savills is currently forecasting 4% growth in 2026.

But Tom Bill, head of UK residential research at Knight Frank, is slightly more pessimistic.

He said: “Both main UK indices show how pre-Budget uncertainty pushed house price growth close to zero. Clarity has now returned, but an array of tax rises, which include an income tax threshold freeze, will increasingly squeeze demand and prices.

“Offsetting that is the fact that mortgage rates are expected to drift lower next year as the base rate bottoms out at around 3.25%.”

Annual house price growth dipped in November but the market remained resilient despite threats of increased taxation in the Autumn Budget, new figures show.

House prices are up 1.8% in the year to November, according to Nationwide’s House Price Index, down 0.6 percentage points from October’s annual price growth figure of 2.4%.

The slower rate of annual growth meant the price of a typical house increased by 0.3% between October and November, bringing the average price of a UK house to £272,998 – a month on month rise of £772.

Robert Gardner, chief economist at Nationwide, said: “The housing market has remained fairly stable in recent months, with house prices rising at a modest pace and the number of mortgages approved for house purchase maintained at similar levels to those prevailing before the pandemic.

“Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid struck and house prices are close to all-time highs.”

Did the Budget affect house prices?

In November, many homeowners and prospective buyers will have been anticipating a shake-up to how property is taxed in the Autumn Budget, which was delivered on 26 November.

In the weeks leading up to it, reports suggested the chancellor was going to hike property taxes, but most owners were spared. Just those with a home valued at £2 million or more face a new ‘mansion tax’.

These rumours had a strong effect on consumer sentiment, which took a hit before the Budget, but this does not seem to have translated into a palpable dip in the market.

Gardner at Nationwide believes the new ‘mansion tax’ is “unlikely to have a significant impact on the housing market” in the long term as the new levy will apply to less than 1% of properties in England and around 3% in London.

Gardner expects the increase to the rate of income tax on property income to have a more profound impact, as it may dampen the supply of new rental properties.

Alice Haine, personal finance analyst at Bestinvest, supports this view, calling the two percentage point tax hike a “sting in the tail” for landlords.

She added: “This could be the tipping point for some landlords, prompting sales after years of rising taxes and tighter regulation, while others may resort to passing increased costs on to tenants – pushing rents even higher.”

Where will house prices go next?

Following a Budget where the worst-case scenarios were avoided, Gardner at Nationwide believes the outlook for some buyers is set to improve.

He said: “Looking forward, housing affordability is likely to improve modestly if income growth continues to outpace house price growth as we expect. Borrowing costs are also likely to moderate a little further if Bank Rate is lowered again in the coming quarters.

“This should support buyer demand, especially since household balance sheets are strong. Indeed, in aggregate, the ratio of household debt to disposable income is at its lowest for two decades.”

Increased affordability in the market is also expected by Haine at Bestinvest, who said market confidence could return after this Autumn’s pre-Budget dip, as buyer demand and the number of listings could increase.

She said: “While property tax changes may dampen demand at the upper end of the market, and higher taxation could accelerate buy-to-let exits, there could be a resurgence in wider market activity. Buyers who paused moving plans in the run-up to the Budget, in a bid to assess the impact of any new measures, may now make a return.”

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House prices in southern England dropped for the first time in 18 months due to Budget fears and greater stock on the market.

Prices in London, South East and South West England fell in the year to November by up to 0.2%, Zoopla’s latest House Price Index shows.

In the pre Budget rumours, it was widely speculated that chancellor Rachel Reeves would announce a new annual tax on homes valued at over £500,000 in the Budget, and while no such announcement was made, it has ultimately led to prices sliding in some regions.

Speculation that a property tax could be introduced was one of the main causes for the fall in house prices in southern England, Zoopla said, as buyers held off to see what was confirmed.

Zoopla said there were 12% fewer sales agreed in the four weeks to 23 November compared to last year, which put downward pressure on prices.

Property prices in all other regions of Britain remained more stable, however, all showing house price growth in the year to November.

Prices grew the most in the North West of England (2.9%), then Scotland (2.7%) and North East England. Prices across England, Wales and Scotland went up by 1.3%.

It means the average house price across UK now stands at £270,200.

The elimination of the threat of extra taxes will lead to an increase in buyer demand at the start of 2026, Zoopla said, with sellers in southern England set to see the biggest boost.

The proportion of homes currently on sale for over £500,000 in London is 51% and 34% in South East England, compared to an average of 24% across the UK.

Richard Donnell, executive director at Zoopla, said the “Budget bark was worse than the Budget bite” for the housing market.

“Our data shows the underlying demand to move home remains strong. With greater certainty we expect a rebound in housing market activity that builds into the new year with households who paused home moving decisions over recent months return with greater confidence.”

Stamp duty ‘fiscal drag’

Zoopla said frozen stamp duty thresholds were leading to a “fiscal drag” effect wherein rising house prices mean buyers are increasingly having to pay higher amounts.

Some experts, including property advice website Homeowners Alliance, have called for the thresholds to rise in line with house prices.

People buying their second home currently pay no stamp duty on the first £125,000 of a home, 2% on the portion from £125,001 to £250,000 and 5% on the amount between £250,001 and £925,000.

First-time buyers pay no stamp duty on the first £300,000 portion of a property, then 5% on the portion from £300,001 to £500,000.

Zoopla said the number of homes bought by existing homeowners where the cost of stamp duty is more than 2.5% of the house price has jumped from 21% to 33% since 2019.

Should you buy or sell in the run up to Christmas?

Knowing when is the best time to buy a home is the golden ticket, but there are no set rules.

Spring is generally considered the best time to buy a house, as more homes are expected to be on the market, but this isn’t always the case.

Paula Higgins, founder and chief executive of property advice website HomeOwners Alliance, said buyers could get a good price in the run up to the new year due to sellers holding off pre-Budget and pent-up demand yet to kick in meaning competition is low.

“Sellers who’ve been on the market for weeks are far more open to negotiation. This is usually the case in a normal year, but even more so this year with so much speculation around the Budget and it being so late in the year. Move now and you could bag a bargain before everyone rushes back into the market in January.”

The same sentiment goes for sellers though, Higgins said. Those getting their house on the market now could beat others waiting to list in the new year.

“If you’re going to list, get your photos done before the Christmas decorations go up - otherwise your home will look dated come January.”

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Average house prices declined in September and slowed on a yearly basis as Budget uncertainty hampers the housing market, Office for National Statistics (ONS) data shows.

The latest ONS House Price Index, based on Land Registry data, shows average property values fell by 0.6% between August and September, the first drop since April 2025.

Annual price growth was 2.6%, down from 3.1% in August.

This puts average UK house prices at £271,531.

Richard Donnell, executive director of research at property website Zoopla, blamed uncertainty ahead of the Budget and affordability pressures.

He said: "Pre-Budget jitters are hitting housing market activity at the start of the home buying process. Demand and sales agreed for homes priced over £500,000 are down by up to 9% on this time last year as buyers pause home buying decisions.

"There are 350,000 homes where the sale has been agreed moving towards completion and some buyers of expensive homes will be nervous about possible changes to council tax for their new purchases.”

While the Land Registry figures are dated, Jason Tebb, president of property website OnTheMarket, said they suggest that there is some caution and price sensitivity in the market.

He said: “With the Budget imminent, we urge policymakers to focus on stability, assisting confidence and supporting the housing market, which is so vital to the wider economy.”

What is happening with UK house prices?

Many analysts say the housing market has been on pause in recent months amid rumours of tax changes in the Budget which could alter property taxes.

Lower stamp duty thresholds since April have already deterred some buyers and now whispers about stamp duty changes and even a mansion tax in the Budget appear to have caused more hesitation, hitting demand and pushing average prices down.

Average house prices in the 12 months to September 2025 increased in England by 2%, in Wales by 2.7% and by 5.3% in Scotland.

Northern Ireland recorded a 7.1% annual rise between July and September 2025.

Of the English regions, annual house price growth was highest in the Yorkshire and The Humber, where prices increased by 4.5%.

London was the English region with the lowest annual inflation, where prices decreased by 1.8% in the 12 months to September 2025.

Simon Gerrard, chairman of Martyn Gerrard Estate Agents, blamed the drop in London house prices on poor government messaging on Budget changes.

He said: “Another week brings another turn of the rumour mill. Now we’re hearing the government has abandoned plans to raise income tax and will try to tax high-value properties instead. This was mooted in the summer and swiftly dropped after the lunacy of the idea became quickly apparent.

“These measures will distort the entire housing market, hurt upward mobility and won’t raise the money hoped for. Second steppers are already struggling to move up the ladder, and this will exacerbate these issues. Gumming up the property market lowers transactions and only hurts government revenues.

“This tax will overwhelmingly hit families in London. Let’s call it what it is, this is a London tax. It’s nigh on impossible to start a family in the capital and this will ensure that remains the case for many years to come.”

Will house prices rise in 2025?

Average house price data can be distorting as no-one really lives in a typical house and there are variations by region and the type of property.

But most analysts agree the direction of travel for house prices is slower.

Some have even revised their forecasts, with estate agency Knight Frank now predicting that average UK mainstream prices will rise by 1% in 2025, down from a previous figure of 3.5% in May.

Zoopla is predicting that average UK house prices will rise by an average of 1% to 1.5%.

Donnell added: “The last house price index data shows a slowdown in house price and rental inflation as affordability pressures bite. This slowdown is expected to continue into 2026. More first-time buyers and lower migration for work and study is easing the pressure on rents, with rents for new lets rising at their lowest level for four years.

"All eyes are now on next week's Budget – if the housing market gets off lightly then we expect a rebound in demand and activity, but if the impact on consumer confidence is greater, then we could have a sluggish start to 2026.”

While headline growth has softened in England, Jonathan Handford, managing director of Fine & Country, added that stronger rises in Wales, Scotland and Northern Ireland show a market that is far from uniform.

He said: “Activity is being driven by serious, needs-based movers, and September’s transaction levels, up 4% year on year, underline that momentum.

“Yes, uncertainty around the Autumn Budget is causing some hesitation, especially at the top end where tax changes are a concern, but the fundamentals remain encouraging.

“More stock, steady demand and improving real incomes are contributing to a more balanced market. Provided the economic backdrop continues to stabilise, we expect a modest but sustained pace of activity as we head into 2026.”

UK asking prices have experienced their biggest November drop in more than 10 years amid Budget jitters and a decade-high number of homes for sale.

Average new seller asking prices fell between October and November by 1.8% from £371,422 to £364,833, according to property website Rightmove.

The average reduction between the two same months over the last 10 years is 1.1%. This year's drop marks the biggest November fall since 2012.

Rightmove said the high number of properties for sale on the market was putting downward pressure on prices while there were concerns over what could be announced in the Budget on 26 November.

A number of changes could be announced by the chancellor Rachel Reeves later this month with major ramifications for the housing market.

This includes a new tax on the sale of homes worth over £500,000, as well the removal of the capital gains tax exemption on primary residences valued at more than £1.5 million. A new “mansion tax” could also be levied on homes worth more than £2 million.

Both pre-Budget jitters and the excess of homes on sale were compounding the seasonal slowdown in prices usually seen before Christmas, according to Rightmove.

It said over a third of homes available for sale had had an asking price reduction between October and November, with the average price reduction worth 7%. Both these figures are the highest since February 2024.

Colleen Babcock, property expert at Rightmove, said many sellers were “keen to avoid standing out” by over-pricing, while the Budget landing later than usual was prompting would-be buyers to take a wait-and-see approach.

She added: “It appears that the usual lull we’d see around Christmas time has arrived early this year, and sellers who are keen to move are having to work especially hard to entice buyers with competitive pricing.

“This means that average new seller asking prices are now 0.5%, or £1,759, cheaper than a year ago.”

High-end housing market takes biggest hit

House prices across the premium market took the biggest hit, Rightmove said, with the number of sales agreed for homes priced over £2 million down by 13% compared to the same period last year.

Meanwhile, the number of new sellers coming to the market in this price bracket was down by 9%, a larger drop compared to homes at the lower-value end of the market.

Houses priced between £500,000 and £2 million, which could be impacted by rumoured stamp duty reform in England and capital gains tax changes, also suffered between October and November.

Sales agreed on properties within this price range were down by 8% year-on-year, higher than the typical average for this month (5%).

Homes priced under £500,000, which accounts for roughly 75% of the market, were more resilient, Rightmove said.

The number of sales agreed in this sector was down by only 4% year-on-year.

Rightmove said as well as concerns over the contents of the Budget, prospective home-movers had their eyes on interest rates, which, broadly, continue to fall.

The average two-year fixed mortgage rate was 4.91% as of 14 November, according to Moneyfactscompare.co.uk, down from 5.48% the same date a year ago.

However, some home buyers may be waiting until rates come down further.

The Bank of England (BoE) held rates at its last meeting on 6 November, stating it believes inflation has peaked at 3.8%. This could signal a cut is coming at its next meeting on 18 December, which may mean mortgage rates drop.

Babcock added: “If we can see some mortgage rate reductions over the next few weeks, supported by a December Bank Rate cut, we could start 2026 on a positive note with the end of the prolonged Budget hiatus lifting the gloomy atmosphere of recent weeks.”

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