The latest Halifax data indicates that the UK housing market has moved into a more stable and measured phase following several years of volatility. January recorded a 0.7% monthly rise, suggesting activity has cooled from overheating levels without slipping into decline. Annual growth remains modest, with regional performance diverging across the country. Expectations for 2026 centre on gradual improvement rather than a return to rapid price acceleration.
- Annual house price growth remains in low single-digit territory nationally
- Mortgage rates have eased from peak levels but remain higher than pre-2022 norms
- An interest rate cut is expected in the Spring, with wage growth currently outpacing inflation
- Expiring fixed-rate mortgage deals continue to influence affordability and demand
Original article source: Business News Wales
The UK housing market is settling into a more sustainable rhythm – after several years of extraordinary price growth followed by a sharp interest rate shock. Monthly movements are modest and annual growth is controlled. That is typically how stable markets behave.
Importantly, demand has not disappeared but has normalised.
Mortgage rates, while higher than the ultra-low levels of the pre-2022 period, have already come down from their peak. With wage growth continuing and a rate cut widely expected in May, affordability pressures are beginning to ease incrementally.
London and the South East, where values are already elevated, are naturally more sensitive to borrowing costs. Meanwhile, the Midlands, Northern England, Scotland and Northern Ireland continue to benefit from relative affordability and stronger rental fundamentals. This supports value and growth rarely moves in lockstep across the country.
Higher mortgage rollover costs will weigh on some households, but this also reduces speculative heat. At the same time, the underlying structural shortage of housing – especially in high-demand urban centres – has not been resolved. Supply remains constrained, and rental demand continues to absorb available stock.
Stability offers clarity to landlords and investors. Price growth tracking close to inflation may lack the drama of previous cycles, but it provides predictability.
