UK property prices have fallen to their lowest level since the summer, as growth in the housing market slows. Halifax’s latest house price index shows a 0.6% month-on-month drop, reflecting a typical slowdown over the Christmas period.

The average UK property price fell in December to its lowest level since June, as growth in the housing market slowed toward the end of 2025.

According to Halifax’s latest house price index, prices dropped 0.6% month-on-month, from £299,544 in November to £297,755 in December.

In the 12 months to December, UK house price growth slowed to 0.3%, down from 0.6% in the year to November, continuing a decline seen throughout 2025.

Annual growth earlier in the year, in the 12 months to January 2025, had been 2.9%.

Amanda Bryden, head of mortgages at Halifax, said: “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 Base Rate cut and there are an increasing number of lending options available for those borrowing at a higher loan-to-value,” she added.

Industry reaction: 

Tom Bill, head of UK residential research at Knight Frank: “House price growth effectively evaporated last year as supply built and demand was undermined during months of tax speculation before the Budget. Now there is more clarity and mortgage rates continue to head lower, we expect stability rather than the feelgood factor in the early months of 2026. Despite the growing risk of domestic political uncertainty, we believe house price growth should climb to 3% by the end of the year.”

Marc von Grundherr, Director of Benham and Reeves: “A monthly drop in house prices during December may seem like the proverbial lump of coal, but it is simply a case of seasonality and the underlying feeling currently pulsing through the market is one of optimism.

“With the political uncertainty of the Budget having now evaporated and interest rates trending downwards, the nation’s buyers are re-entering the market with renewed vigour, and the outlook for 2026 is a positive one.”

James Nightingall, founder of HomeFinder AI: “December’s house price growth was mostly subdued amid reduced buyer and seller motivation. After Christmas, however, buyers started carrying out more online searches whilst sellers chose this period, and particularly Boxing Day, to put their property on the market. This uplift in buyer and seller activity has continued into the new year, resulting in a busy and more competitive January market.”

Verona Frankish, CEO of Yopa: “A marginal monthly dip in December is not unusual and largely reflects the seasonal slowdown that comes with the Christmas period, when both buyers and sellers tend to pause their plans.

“Importantly, the backdrop has improved considerably. With Autumn Budget uncertainty now behind us and interest rates falling just before Christmas, buyer confidence has strengthened, and we are already seeing a notable uplift in market activity. This renewed momentum should provide support for house prices as we move through 2026.”

Iain McKenzie, CEO of The Guild of Property Professionals: “The 0.6% dip in house prices reported by Halifax in December, reflects a market that slowed toward the end of the year rather than any fundamental weakness. With annual growth easing to +0.3%, it’s clear that uncertainty around the Autumn Budget and the usual seasonal slowdown weighed on prices in the final months of 2025.

“However, as we move into January 2026, the year is starting on far firmer ground. The traditional post-Christmas uplift in activity is already becoming evident, and the wider backdrop is far more supportive. The Bank of England’s decision to cut the Bank Rate to 3.75%, combined with mortgage rates continuing to edge lower is improving affordability compared with this time last year.

“Importantly, buyer demand never disappeared. Transaction levels held up well through 2025 despite headwinds, with around 1.2 million homes sold, the highest level since 2022. Many buyers who paused decisions due to uncertainty are now returning with renewed confidence, supported by rising incomes, more stable borrowing costs, and the widest choice of homes in a decade.

“Looking ahead, we expect a stronger-than-usual start to 2026, with higher transaction volumes and a gradually improving outlook for price growth as the year progresses. That said, realism on pricing remains crucial. With plenty of choice available, well-priced homes are attracting interest, while sellers who overreach are more likely to see offers come in below asking. Overall, the market looks set to remain stable, with modest price growth of around 2.4% forecast over the course of the year.”

Nathan Emerson, CEO of Propertymark: “A modest fall in house prices highlights that affordability pressures are still weighing on the market, despite recent improvements in mortgage rates. 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.

“While price softening may help some buyers, especially first-time buyers, a sustainable recovery will depend on further rate stability, income growth, and addressing the chronic undersupply of homes.”