UK house prices drop 0.6% to six-month low in December | Personal Finance | Finance

January 8, 2026 3,594

The typical UK house price dropped to its lowest point in six months during December, new figures have revealed. Property values declined by 0.6% or £1,789 month-on-month on average in December, bringing the average house price to its lowest level since June last year, Halifax reported.

Annual growth in property values also slowed to 0.3%, down from 0.6% in November. Amanda Bryden, head of mortgages at Halifax, said: “Average house prices fell by 0.6% in December, down £1,789 compared to November, with a typical property now costing £297,755, the lowest since June 2025.” The average UK house price in June 2025 stood at £297,157.

Ms Bryden continued: “While this may feel like a subdued close to the housing market in 2025, overall activity levels were resilient over the last year and broadly in line with the pre-pandemic average. 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.

“Further, mortgage rates are already reducing following the latest (Bank of England) base rate cut and there are an increasing number of lending options available for those borrowing at a higher loan-to-value.”

Ms Bryden noted that “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% and 3%”.

Northern Ireland remains the UK’s top performer in terms of percentage house price growth, with a 7.5% annual increase, according to Halifax.

In stark contrast, average house prices in London have declined by 1.3% annually.

Karen Noye, a mortgage expert at wealth manager Quilter, said: “The end of the year often leaves the housing market short on urgency, and December was no exception.

“With many households having already mentally parked moving plans, the late timing of the budget added a further reason for buyers and sellers to pause, leaving activity limited as attention shifted towards the new year rather than pushing ahead before Christmas.

“Against that backdrop, Halifax’s figures showing prices falling by 0.6% over the month point to a market that was subdued rather than fundamentally weakening.”

Signs of pent-up demand being released into the market were evident when Rightmove reported its busiest Boxing Day for website visits in December 2025.

Rightmove revealed that the most popular type of homes listed for sale on Boxing Day were smaller properties with two bedrooms or fewer, which are often targeted by first-time buyers.

According to the website, new buyer and seller activity on Boxing Day in 2025 was busiest in the South East, east of England and London.

Jeremy Leaf, an estate agent operating in north London, said: “Prices may have slipped a little while some caution remains but since returning after the break we have noticed in our offices how recent falls in interest rates and inflation have started to improve buyer and seller confidence.”

Amy Reynolds, head of sales at London-based estate agency Antony Roberts, said: “There are clear signs that the market is on a more positive footing. We’ve seen a genuine post-budget bounce, with improved buyer confidence and several sealed bids in December and already in January, something that was far less common last year.”

Iain McKenzie, chief executive of The Guild of Property Professionals, said: “With plenty of choice available, well-priced homes are attracting interest.”

Nathan Emerson, chief executive of property professionals’ body Propertymark, remarked: “Overall, there is still a sense of consumer caution lingering within the marketplace, mostly in respect of wider economic considerations, such as the rate of inflation and how this directly impacts affordability for many.”

Here are average house prices and the annual change, according to Halifax. Regional annual change figures are based on the most recent three months of approved mortgage transaction data: