2 January 2026
If you are covering the latest Nationwide House Price Index, please see the following comment from Ian Futcher, financial planner at Quilter:
"Although Christmas is now behind us, December itself is rarely a month that sees much momentum in the housing market. This year, that seasonal slowdown was amplified by the timing of the budget. With key fiscal decisions pushed later into the year, many prospective buyers and movers chose to put plans on ice until they had clarity on the policy landscape, before then allowing those plans to slip further as attention turned to the festive period.
Against that backdrop, Nationwide’s figures showing prices slipping back by 0.6% over the month reflect a market that was firmly in ‘wait and see’ mode.
On an annual basis, prices are just 0.6% higher than a year ago, underlining that activity has been subdued and house prices have stagnated. A lack of available housing stock continues to provide underlying support, but affordability pressures limits how far prices can move ahead.
The interest rate backdrop has now shifted though. The Bank of England’s decision to cut rates in December marks an important turning point after a prolonged period of tight monetary policy. However, this alone is unlikely to unlock a rapid recovery in activity. Many households remain cautious, and the market may continue to move slowly in the early part of the year.
That slower backdrop is important when thinking about mortgage pricing. With demand still tentative, lenders are likely to compete hard for business, particularly among lower-risk borrowers. That competitive pressure should help keep mortgage rates edging lower over time, even if the improvements are gradual rather than dramatic.
For those coming to the end of fixed-rate deals, the outlook is beginning to improve. While many remortgagers are still facing much higher repayments than a few years ago, increased competition and falling rates should mean fewer households experience the sharp payment shocks that have weighed on confidence.
With the budget now behind us and greater clarity on the direction of interest rates, we may finally see at least some of the housing plans that were shelved late last year being dusted off as buyers and movers return to the market in the early months of 2026."
