AFFORDABILITY issues persist but the house price to income ratio was at its lowest in over a decade in December, a major boost for people seeking to buy their first home, the Halifax said this morning in its December house price index.
Brokers and property market experts said improving affordability could “make 2026 the year of the first-time buyer” and help many more “fledgling first-time buyers finally fly the nest”.
The Halifax revealed that 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.
On an annual basis, growth slowed to +0.3%, down from +0.6% in November.
Amanda Bryden, Head of Mortgages, Halifax, said: “While affordability pressures persist, the house price to income ratio was at its lowest in over a decade in December, striking a positive note for those looking to purchase their first home.
“On this basis, and 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%.”
Cracking the affordability enigma code
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, said: “Affordability is the key to unlocking the property market in 2026. Modest price growth in 2025 helped more people achieve the dream of homeownership and that looks set to continue into 2026.
“Lenders innovated aggressively last year on the affordability front as they know that cracking the affordability enigma code is essential to helping more first-time buyers onto the ladder and for the wider health of the property market.”
Babek Ismayil, CEO at homebuying platform OneDome, was also upbeat: “Affordability is improving by the day and will be further boosted if mortgage rates, as expected, continue to fall in the early stages of 2026.
“Lenders are fully aware that they need to open avenues for first-time buyers and the level of innovation among banks and building societies was impressive last year.
“Slow house price growth, coupled with lower rates and innovative lending, could help many first-time buyers get the keys to their dream home in 2026.”
Year of the first-time buyer
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said: “Lenders initiated an assault on affordability on multiple fronts during 2025 and, with rates expected to continue to edge down in the weeks ahead and house price growth subdued, 2026 could be the year of the first-time buyer.”
Craig Fish, Director at London-based Lodestone Mortgages, described the house price-to-income ratio hitting a decade low as significant.
He said: “It’s the green light many first-time buyers have been waiting for. With pent-up demand in the system and mortgage rates continuing to ease, 2026 could finally be the year aspiring homeowners make their move.
“If you’ve been sitting on the fence thinking homeownership is out of reach, now’s the time to speak with a broker. You might be pleasantly surprised by what you can actually afford as the numbers are more favourable than they’ve been in years.”
Bob Singh, Founder at Uxbridge-based Chess Mortgages, agreed that affordability looks set to improve but said additional measures may be needed to really stimulate the market.
He continued: “With rates moving in the right direction, affordability will continue to improve as lenders increase their loan-to-incomes for average earners.
“But what is desperately needed is the return of a Help to Buy-type scheme and stamp duty changes to ensure prices remain in positive territory. The next Bank of England decision will also be a key factor in infusing confidence into the busy spring market.”
The sweet spot
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, said: “With lenders relaxing affordability models and starting to innovate more products to help borrowers achieve their desired lending requirements, we should see a much more positive shift in the property market in 2026. This year could well be the year that many fledgling first-time buyers finally fly the nest.”
Meanwhile, Ranald Mitchell, Director at Norwich-based Charwin Mortgages, said 2026 will be the “sweet spot” for those looking to buy their first home.
He continued: “Affordability is at its best in a decade and price growth has cooled, which is exactly what oils the wheels of the housing market. More buyers can finally pass affordability checks, first-time buyers get a genuine foothold and chains have a better chance of completing.”
Photo by Jametlene Reskp on Unsplash
