House prices: What experts say will happen in 2026 after another fall in December
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UK house prices fall – but it’s not all bad news for homeowners
- UK house prices fell by an average of 0.6 per cent in December, following a 0.1 per cent decrease in November, with the average home now valued at £297,755.
- The decline was largely attributed to uncertainty surrounding potential property-related tax changes in Rachel Reeves’s autumn Budget, which impacted market sentiment.
- Despite the recent drops, experts anticipate house prices will stabilise in the short term and begin to rise again in 2026, with some predicting a 3 per cent growth by year-end.
- Lower mortgage rates, with six interest rate cuts since August 2024, and improved affordability are expected to boost buyer confidence and activity, benefiting both first-time buyers and those refinancing.
- London was an exception, with prices flatlining or falling throughout 2025, including a 1.3 per cent annual drop across the capital and double-digit declines in its most expensive postcodes.