LONDON: British house prices rose by a weaker-than-expected 0.3% in the year to December, the slowest annual increase since March 2024, as economic and tax uncertainty weighed on the market, mortgage lender Halifax said on Thursday.
Prices fell 0.6% month-on-month in December, following a 0.1% decline in November. Economists polled by Reuters had expected prices to rise 1.1% year-on-year and increase 0.2% on the month.
Halifax said the December decline was likely linked to uncertainty late in the year and could begin to unwind. It added that lower mortgage rates and modest price growth have improved affordability for first-time buyers, with the house price-to-income ratio at its lowest level in more than a decade.
However, analysts cautioned that affordability gains may be limited. Matt Swannell, chief economic adviser at the EY Item Club, said easing labour market conditions could slow wage growth and leave little room for sharp mortgage rate cuts in 2026.
The Bank of England cut interest rates to 3.75% from 4% in December, with markets pricing in one or two additional quarter-point cuts this year.
The data broadly matched figures from Nationwide, which reported a 0.4% monthly fall in December and the weakest annual growth since April 2024.
Halifax forecast annual house price growth of 1% to 3% in 2026. A Reuters poll conducted in December showed prices are expected to rise 2.8% next year, following a 2% increase in 2025.
Regionally, prices in London fell 1.3% from a year earlier, while Northern Ireland recorded the strongest growth at 7.5%.
— Reuters
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