21 January 2026
If you are covering the latest Government House Price Index, please see the following comment from Ian Futcher, financial planner at Quilter:
November’s data points to a housing market that was edging forward rather than accelerating. Average UK house prices rose by 2.5% in the year to November, lifting the typical property value to £271,000, but monthly growth of 0.3% highlights how limited that momentum was.
The timing of this data is important. It captures behaviour in the run-up to November’s budget, when uncertainty around potential tax and housing measures encouraged many buyers and sellers to pause. That caution appears to have carried into year-end, with other house price indicators suggesting growth softened or stalled in December rather than building further momentum.
Mortgage costs have eased from their peaks, but affordability is still stretched, meaning price growth is being supported by tight supply rather than a broad recovery in demand and this will continue into 2026.
For first-time buyers in particular, conditions remain challenging. Prices may no longer be rising rapidly, but higher interest rates mean the monthly cost of home ownership is still prohibitive for many, keeping demand constrained even as prices stabilise.
Looking ahead, the outlook for 2026 will depend largely on mortgage rates. Further gradual easing would help improve affordability at the margins and support modest price growth, but a return to ultra-low rates looks unlikely. As a result, the housing market is likely to remain slow-moving, with prices drifting rather than surging and confidence rebuilding only gradually.
