HOUSE prices fell unexpectedly in December as experts warned “it’s likely property prices will continue to stall in 2026”.
UK house price growth slowed to 0.6% in December, from 1.8% in November, with prices actually falling by 0.4% month on month, Nationwide HPI said.
Northern Ireland was the best performing area for third year running, with prices up 9.7% in 2025. East Anglia was the weakest performing region, with prices down 0.8% over the year.
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “UK house prices ended 2025 on a softer note, with annual price growth slowing to 0.6%, from 1.8% in November, the slowest pace since April 2024.
“The high base for comparison can partly explain the slowdown (annual price growth was a solid 4.7% in December 2024), although prices fell by 0.4% month on month, after taking account of seasonal effects.”
Property experts said house prices are expected to continue to stall in 2026.
The market is in neutral
Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance, said: “House prices slowing in the majority of the UK is unsurprising as higher interest rates, coupled with the changes to stamp duty and lack of incentives for first-time buyers has left the market in neutral.
“With no changes to the housing market from the government on the horizon, it’s likely house prices will continue to stall. Lower interest rates which appear to be on their way this year may stimulate the market but it remains to be seen if this will be enough to bring buyers back.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said the market is waiting to see if first-time buyers return in the coming weeks.
He continued: “There has been a noticeable slowdown within the property market for several months, with many buyers awaiting news of the late Budget before committing to any purchase.
“We wait to see if the first-time buyers come back to the market early in 2026, as they are the catalyst – with the best mortgage rates for 3 years, and the highest affordability figures, there is little else the mortgage world can do.”
Noticeable slowdown
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, said Northern Ireland was bucking the UK trend.
He added: “Northern Ireland outperformed the rest of the UK in 2025 for the third year running, supported by lower average prices, strong demand and a chronic lack of housing supply, according to Nationwide’s House Price Index.
“By contrast, weaker performance elsewhere suggests many buyers and movers sat on their hands last year, likely deterred by uncertainty around the Autumn Budget. Despite ongoing pressure from interest rates and household finances Northern Ireland’s housing market remains resilient, with demand holding firm especially among first-time buyers.”
Buyers sat on their hands through autumn
Bob Singh, Founder at Uxbridge-based Chess Mortgages, said he expects three base rate cuts by the Bank of England in 2026.
He continued: “Today’s house price figures are unsurprising in the wake of the dampening effect caused by the Budget as well as seasonal factors. The housing market has however remained resilient spurred on by the prospect of lower interest rates and extended lending multiples from many lenders.
“Borrowers on average wages can avail 5.5/6 times their income with minimal deposits to get on the housing ladder. 2026 will be an interesting year with many external factors still at play. The prospect of three base rate cuts sits high on the list of reasons the market will keep moving ahead.
“However with 1.9m people coming off low fixed rates and facing higher mortgage payments, the UK is not out of the woods yet.”
Kundan Bhaduri, Entrepreneur, Investor and Landlord at London-based The Kushman Group, said potential buyers delayed plans for purchases at the end of 2025.
He added: “Strangely, Nationwide has described the stagnation we are seeing in the market as being ‘resilient,’ which is rather like calling a patient on life support ‘stable.’ The reality is that buyers sat on their hands through autumn last year, waiting to see whether Rachel Reeves would deliver the property tax raid that never actually materialised, and prices duly reflect that paralysis.
“The much trumpeted surge in first-time buyers and high LTV lending also confirms that desperate buyers are going to be stretching themselves thinner in 2026 to access an overpriced market.”
