House prices in England have recorded a noticeable decline, falling to their lowest level in six months, according to the latest housing market data.
Figures released by Lloyds Banking Group’s housing arm, Halifax, show that average property prices across the country dropped sharply in December, reflecting softer demand and economic uncertainty.
Monthly and Annual Price Trends
The Halifax House Price Index revealed that home prices fell by 0.6% in December, equivalent to a decline of £1,789 per property. As a result, annual house price growth slowed to 0.3%, down from 0.6% in November, highlighting a cooling trend in the market.
The average house price in England now stands at £297,755, while London recorded the steepest decline among regions. Prices in the capital fell 1.3%, bringing the average London home price down to £539,086.
Why Are Prices Falling?
Amanda Bryden, Head of Mortgages at Halifax, said the decline reflects affordability pressures, high borrowing costs earlier in the year, and cautious buyer sentiment as households reassess finances amid wider economic uncertainty.
However, she noted that the market could stabilise in the coming months as mortgage conditions improve following recent interest rate cuts by the Bank of England.
Outlook for 2026
Property analysts expect a gradual recovery rather than a rapid rebound. Forecasts suggest house prices could rise between 1% and 3% during 2026, supported by easing mortgage rates and renewed buyer confidence.
Meanwhile, online property platform Rightmove reported that Boxing Day was the busiest day of the year for property searches, with first-time buyers showing strong interest in two-bedroom and smaller homes.
What This Means for Buyers
For prospective buyers, especially first-time purchasers, the current dip may offer improved affordability and negotiating power. Sellers, however, may need to adjust expectations as the market recalibrates after years of volatility.
Overall, while short-term pressure remains, improving credit conditions could help the UK housing market regain momentum later in the year.
