The Halifax House Price Index shows that UK property prices fell in the last months of the year, recording a 0.6% decline in December.
Annual growth in December continued to be down from the heights of earlier in the year and sits at 0.3%, extending the decline from November’s 0.7% rate. However, the softer annual figure is less a sign of weakening demand and more a consequence of the stronger price gains recorded in late 2024. In other words, the market is recalibrating rather than retreating.
A pronounced North–South split remains evident. Northern regions continue to post firmer year-on-year increases, supported by comparatively better affordability and steadier local demand. In contrast, many southern markets are experiencing flatter conditions as high mortgage costs bite more sharply into household budgets already stretched by the cost-of-living. This is particularly marked in London, driven by a fall in prices in its most expensive boroughs.
Outlook for 2026
The year ahead is likely to be defined by gradual, uneven progress. If inflation continues to ease the Bank of England are likely to enact a cut in interest rates in Spring. This would strengthen buyer confidence, particularly in regions where affordability remains favourable. While no sharp rebound is expected, the foundations for steady and more sustainable growth are emerging.
Among its 30 locations, accountancy and advisory firm MHA has offices in Aberdeen and Edinburgh.
