Halifax has announced that the average house price in the UK rose above £300,000 for the first time in January 2026. This is good news for homeowners, but it could put first-time buyers off entering the property ladder.
The average house price was recorded at £300,077, representing a major milestone for the property industry. Property prices increased by 0.7% in January 2026, which was the biggest rise since November 2024, when prices increased by 1.1%.
On an annual measure, average property prices increased by 1% between January 2025 and January 2026. The average house price growth shows strong signs that the property industry has bounced back after the uncertainty in the lead up to the Autumn Budget announcement.
Many mortgage deals have fallen below 4%, with the Bank of England base rate reducing gradually over the last 18 months. Finance experts are predicting that further rate cuts will follow, helping to make mortgages more affordable.
While house price growth causes challenges for first-time buyers, average wages have risen faster than house prices.
Buying and selling at the same time?
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Another positive for first-time buyers is the increased lender competitivity leading to a greater range of mortgage products. Some lenders have launched products with lower deposit requirements, and there have also been adjustments to affordability stress testing.
In early 2025, the FCA encouraged lenders to relax stress testing so that some borrowers could access a higher maximum loan capacity.
Industry specialists have predicted house price growth ranging between 1% and 4% for the rest of the year.
Amanda Bryden, the head of mortgages at Halifax, shared:
“The housing market entered 2026 on a steady footing. While £300,000 is undoubtedly a milestone figure, and activity levels show a resilient market, affordability remains a challenge for many would-be buyers. All in all, we still think house prices are likely to edge up between 1% and 3% this year.”
Nationwide recently predicted an average house price growth of 2% to 4% for 2026. However, there is a significant variance of growth rates across different regions. The North West of England is experiencing the fastest house price growth, while price growth in London and the South East is the slowest.
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