Average UK house prices have moved above the £300,000 mark for the first time on record, according to the latest figures from mortgage lender Halifax, signalling a steady start to the housing market in 2026.
Data shows that the typical UK property price rose by 0.7% in January, reversing the 0.5% decline recorded in December. This pushed the average home value to £300,077. Annual house price growth also strengthened, rising to 1% compared with 0.4% the month before.
Amanda Bryden, Head of Mortgages at Halifax, said the market had entered the new year with renewed stability. She explained that January’s increase more than offset the previous month’s fall and highlighted that annual growth had also picked up pace. While the £300,000 milestone is significant, she noted that affordability pressures continue to weigh heavily on many potential buyers.
Bryden added that wider economic conditions are offering some support to the housing market. Wage growth has been higher than house price inflation since late 2022, helping to slowly improve affordability levels. This trend, she said, is positive for both buyers and the long-term health of the property market.
She also pointed to the growing number of mortgage products now available below 4%, suggesting that if inflation continues to ease, borrowing costs could fall further as the year progresses. Halifax expects house prices to increase modestly this year, forecasting growth of between 1% and 3% across 2026.
Despite reaching a new high, Halifax said house price growth in recent years has been relatively restrained compared with the rapid rises seen during the pandemic. Over the last three years, average prices have increased by around 5.7%, equivalent to roughly £16,000. This contrasts sharply with the period between 2020 and 2023, when prices surged by nearly 19%, or more than £44,000, driven by ultra-low interest rates and a spike in demand for larger homes.
Bryden acknowledged that headline figures may appear daunting, particularly for first-time buyers. However, she stressed that most buyers are purchasing smaller properties in locations that fit their budgets rather than aiming for the national average price.
She highlighted that many areas, especially in northern parts of the UK, still offer homes at far more affordable levels, often below £200,000. While affordability remains challenging, stronger wage growth and easing mortgage rates have helped relieve some of the strain in recent years. Halifax expects this gradual improvement to continue through 2026, making home ownership more achievable for a wider group of buyers with the right advice and financial support.
Regional differences remain pronounced, with a widening divide between the north and south of the UK. Northern regions have maintained momentum from last year, with demand and price growth staying relatively strong.
Northern Ireland recorded the highest annual increase, with prices rising 5.9% to an average of £217,206. Scotland followed closely behind, with values up 5.4% to £221,711. Wales saw a more modest annual rise of 0.5%, taking the average price to £228,415.
Within England, the strongest growth was again concentrated in the north. Prices in the North West climbed by 2.1% to £244,329, while the North East recorded annual growth of 1.2%, bringing the average property value to £181,198.
In contrast, much of southern England saw price declines over the past year. The South East, South West, London and the East of England all registered annual falls of more than 1%. These regions, which already have the highest property values in the country, tend to be more sensitive to higher mortgage rates and tax changes, both of which can dampen confidence and restrict affordability.
Nathan Emerson, Chief Executive of Propertymark, said market activity has begun to pick up as more homes come onto the market and buyer confidence improves. He attributed this partly to stronger competition among lenders, which has helped stabilise mortgage pricing.
Emerson said the Bank of England’s decision to keep interest rates on hold at 3.75% would provide reassurance to buyers and sellers considering a move. However, he warned that affordability remains a major obstacle for many households. To translate improving conditions into meaningful access to home ownership, he said targeted government support, stable lending policies and measures that directly address affordability pressures will be essential.
Karen Noye, mortgage expert at Quilter, described the current market as one that is “growing steadily rather than booming”. She noted that the average price moving above £300,000 may benefit existing homeowners but risks putting further strain on first-time buyers trying to get onto the property ladder.
Noye added that while competition among lenders is helping to prevent mortgage rates from rising sharply, ongoing affordability challenges and cautious behaviour from both buyers and sellers are likely to keep house price growth subdued in the months ahead.
Overall, the data paints a picture of a housing market that is showing resilience and gradual improvement, but remains constrained by high prices, borrowing costs and regional inequality. While the £300,000 milestone marks a historic point for UK property values, experts agree that the key issue moving forward will be whether affordability can continue to improve enough to support sustainable growth throughout 2026 and beyond.
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