25 March 2026
If you are covering the latest Government House Price Index, please see the following comment from Karen Noye, mortgage expert at Quilter:
"The latest UK House Price Index shows annual house price growth of around 1.3% in January, with average prices near £268,000, but the crucial point is that all of this data predates the sharp repricing in mortgage markets triggered by the outbreak of the war. Monthly momentum had already slipped, with prices falling 0.3% between December and January, suggesting the market was softening even before lenders were forced to rebase fixed rate products in response to the geopolitical shock this March.
"January’s dataset captures a period shaped by falling inflation expectations and gradually improving affordability, not the jump seen in funding costs since the start of the war, that has pushed mortgage rates higher and weighed on buyer confidence. The headline figures therefore provide a backward‑looking snapshot of a market that has already shifted materially.
"As rate volatility feeds through to mortgage offers and stress tests, the pressure on already stretched first‑time buyers is likely to intensify. At the same time, if inflation begins to rise again while wage growth fails to keep pace, household savings will be squeezed for a second time. That combination risks eroding the slight affordability gains seen earlier in the winter and could further dampen demand.
"The modest annual gains recorded in January tell us very little about the trajectory from here. The sharper reality will only begin to show up in the data once the next releases capture the immediate impact of higher borrowing costs, weaker sentiment and tighter household budgets."
