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The news said house price Decline averaged 0.6% in December, a potentially shocking headline number Homeowner – But most experts say it’s not time to panic yet.
Uncertainty over property-related tax changes likely to be announced in Rachel Reeves’ Autumn Budget has prompted caution despite falling house prices interest rate Some lenders have increased mortgage affordability limits.
Latest Halifax Price Index Shows the average house price in the UK is now £297,755 – It’s up just 0.3% in a year, following a modest 0.1% decline in November last year (before the latest decline).
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But heading into 2026, more certainty, coupled with a host of factors that remain sufficient demand from buyers, means experts believe prices will stabilize in the short term and start rising again over time.
Alice Haine, personal finance analyst at Bestinvest, noted that the political situation has eased and the wider property buying environment now looks clearer. “While Chancellor Rachel Reeves’ November property tax rise has proven to be less widespread and imminent than many feared, uncertainty ahead of the fiscal announcement has weighed heavily on market sentiment, with some buyers and sellers rushing to complete ahead of the announcement, while others have paused or abandoned plans altogether,” she said.
“Mortgage rates, which have fallen sharply in 2025 thanks to six rate cuts since August 2024, are likely to improve further after the central bank signaled a more accommodative monetary policy stance on the grounds that inflation had peaked.
“It’s not just first-time buyers who can benefit from improved deals. With around 1.8 million fixed deals due to expire in 2026, those refinancing two- or three-year fixed deals can also enjoy lower repayments.”
Other industry experts largely agree with that assessment.
Tom Bill, head of UK residential research at estate agency Knight Frank, said: “Last year, house price growth virtually disappeared as supply increased and demand eroded during the months of tax speculation ahead of the Budget. Now that there is more clarity and mortgage rates continue to move lower, we expect the first few months of 2026 to remain stable rather than a feel-good factor.”
“Despite the growing risk of domestic political uncertainty, we believe house price growth should climb to 3% by the end of the year.”
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Jonathan Hopper, chief executive of Garrington Property Finders, added that London was the exception to the overall rise in prices throughout the year.
“December’s fall was the lowest of the two halves of the year in most areas. London was the exception, with house prices flat or falling throughout 2025; Halifax data shows average house prices in the capital fell by 1.3% over the year, but in the capital’s most expensive postcodes we saw double-digit falls.
“Such a price adjustment is good news for buyers. Falling prices, combined with lower interest rates and rising wages, have made housing more affordable, with Halifax data showing the ratio of house prices to incomes is now at its lowest level in more than a decade.
“With interest rates back below 4% and homes in London and the South East looking more valuable than a year ago, the stranglehold is finally being lifted.
“Better value and a wealth of choice are attracting buyers, with property portals and estate agents having a busy start to the year, although prices are likely to grow slowly over the coming months rather than resume growth.”
Elsewhere, Andrew Montlake of mortgage broker Coreco echoed expectations of increased activity, saying he “expects a lot of pent-up demand in January and beyond”, while Charwin Mortgages director Ranald Mitchell added: “Demand has not gone away.
“When lenders keep raising rates and confidence in borrowing costs increases, buyers will continue.
“First-time buyers are holding their ground. They are still cautious as affordability is the gatekeeper, but as the numbers increase they are ready to move. The appetite is there, but the monthly payment is the deciding factor.”