Average UK house price hits record £299,892 despite modest growth: Halifax

"While affordability remains challenging, the picture has improved compared to recent years, driven by a combination of above-inflation wage growth, lower interest rates and some expansion of eligibility criteria from mortgage lenders"
- Amanda Bryden - Halifax

The UK housing market delivered steady performance in 2025, with annual growth of 0.7% lifting the average property price to a record £299,892, according to the latest data released by Halifax.

Market activity was shaped by stamp duty changes but remained close to pre-pandemic levels throughout the year. Affordability continues to challenge buyers, though easing mortgage rates and steady wage growth have supported confidence.

Halifax expects property prices to rise modestly in 2026, by between 1% and 3%, though forecast uncertainty remains high given the wider economic backdrop.

"2025 was one of the most settled years for UK house prices over the last decade," said Amanda Bryden, head of Halifax mortgages. "The average UK home now costs £299,892, up just +0.7% over the year, reaching a new record high price."

The biggest talking point was the stamp duty threshold change in spring, which triggered a rush of buyers attempting to beat the deadline. March became one of the busiest months ever for completed transactions, but the spike didn't translate into significant price rises, and activity levels soon returned to normal.

"While affordability remains challenging, the picture has improved compared to recent years, driven by a combination of above-inflation wage growth, lower interest rates and some expansion of eligibility criteria from mortgage lenders," Bryden explained.

First-time buyers have seen particular improvements. Monthly mortgage costs as a share of income are now at their lowest level since 2022, with the rate on a typical two-year first-time buyer mortgage at 90% loan-to-value dropping by roughly 0.8 percentage points over the last year.

Speculation about potential tax rises dominated the second half of the year in the run-up to the Autumn Budget. This kept market confidence subdued for a period, though both prices and activity broadly held steady.

"Looking ahead to 2026, we expect house prices to rise modestly, by somewhere between 1% to 3%," Bryden noted. "While wage growth is expected to slow and unemployment may edge higher, lower interest rates and easing inflation should help to gradually improve homebuyers' purchasing power."

She advised prospective first-time buyers to speak with a mortgage professional early in the process. "They can help you figure out what you can afford, how much you'll need for a deposit, and guide you through the whole process step by step," Bryden added. "There's a lot to consider when looking for your first place, but getting expert advice usually makes things much simpler, giving you the confidence to take that next step."

"Despite the challenges faced over the past year, the housing market has shown considerable robustness, even with borrowing costs remaining elevated and consumer confidence under pressure," said Mary-Lou Press, president of NAEA Propertymark.

"Greater affordability, supported by stronger wage growth relative to house prices and improved access to higher loan-to-value lending, has played a crucial role in keeping buyers active, particularly those entering the market for the first time," Press explained.

"However, supporting a healthy housing market will require policies that strike the right balance for buyers, renters, and those providing much-needed homes."