House costs fall for second month – however they WILL rise in 2026 says Halifax

House prices fell for the second month in a row in December, according to the latest figures from Halifax.

The average property fell in value by 0.6 per cent in December, according to the mortgage lender, down £1,789 compared to November.

This follows a 0.1 per cent fall in November, with a typical property now costing £297,755, the lowest since June 2025. 

It means house prices finish the year only 0.3 per cent higher than they started it. 

The typical UK homeowner will finish the year just £952 better off than in 2024 based on Halifax’s metrics.

However, the bank thinks things are looking up for 2026 and says house prices could rise by up to 3 per cent.

Moving sideways: Average property price is now £297,755, the lowest since June, according to Halifax, and less than £1,000 higher than a year ago

Amanda Bryden, head of mortgages at Halifax, said: ‘Various forces are poised to somewhat buoy the market heading into 2026. 

‘While December’s monthly fall in prices was likely related to uncertainty in the latter part of the year, this should now be starting to unwind.’

She added that cheaper mortgage rates would encourage people to move home, and help first-time buyers get on the ladder.

‘Mortgage rates are already reducing following the latest base rate cut and there are an increasing number of lending options available for those borrowing at a higher loan-to-value,’ Bryden said.

‘While affordability pressures persist, the house price to income ratio was at its lowest in over a decade in December, striking a positive note for those looking to purchase their first home.

‘On this basis, and recognising the headwinds that may affect buying power – such as the slowing of wage inflation and flattening employment rates – we expect a modest rise in house prices during the year of between 1 per cent and 3 per cent.’

On the up? House prices should rise more in 2026 than in 2025, experts suggest

Anthony Codling, head of European housing and building materials research for investment bank RBC Capital Markets, also believes house prices will rise this year. 

‘With wages still rising and mortgage rates expected to fall in 2026 we expect house price growth to be higher in 2026 than in 2025,’ he said.

‘UK house prices are extremely resilient – we note that since 1946 house prices have risen in 65 years and only fallen in 15. 

‘When it comes to house prices, it pays to be an optimist. 2025 might not have been a great vintage for UK house prices, but it wasn’t a bad one either.’

Where house prices are rising and falling

In England, the North East is seeing prices rise the most, with the average home up 3.5 per cent year-on-year, to £181,798. 

This was followed by the North West, with the typical home up 2.8 per cent, to £245,323. 

However, property prices in London fell by 1.3 per cent over the course of 2025 to £539,086. 

Northern Ireland continues as the strongest performing region overall, with average property prices rising 7.5 per cent over the past year, according to Halifax.

In Scotland, the average home now costs £217,775, after prices rose 3.9 per cent in the 12 months to December.   

Meanwhile, values in Wales rose 1.6 per cent over the year, to an average of £230,233.