UK Housing Market Breaks Records: Average Home Price Surpasses £300,000, Reports Halifax

For the first time ever, the average price of a house in the UK surpassed the £300,000 threshold in January, as housing prices experienced their sharpest rise since November 2024.

According to the latest data from Halifax, there was a 0.7% increase in house prices from the previous month, the most significant since the 1.1% rise recorded in November 2024. Over the past year, prices have increased by 1%.

Halifax, a division of Lloyds Banking Group — the largest mortgage lender in Britain — reported that the average UK house now costs a record £300,077.

However, Nationwide has a different assessment, valuing the average UK home at a significantly lower £270,873.

This growth represents a notable recovery following a sluggish period leading up to Christmas, during which the average property value decreased by 0.5% from month to month. Halifax has since revised this figure down from an initial 0.2% decline.

“The housing market began 2026 on solid ground,” stated Amanda Bryden, head of mortgages at Halifax. “Although reaching £300,000 is certainly a landmark, and the market shows resilience, affordability continues to pose a significant challenge for many prospective buyers. We anticipate house prices may rise by about 1% to 3% over the course of this year,” she added.

Previously, Nationwide had forecasted a potential increase in the average house price in the UK of between 2% and 4% for this year.

Recent cuts to the base rate by the Bank of England’s Monetary Policy Committee have encouraged homebuyers, with the latest cut occurring in December.

This Thursday, the bank decided to maintain the rate at 3.75% due to concerns about persistent inflation, which saw an increase for the first time in five months last December, reaching 3.4%.

Nevertheless, the close 5-4 vote suggests economists are predicting further rate reductions in the upcoming months. Since mid-2024, the committee has lowered rates six times.

On a regional level, Northern Ireland continues to exhibit the strongest annual house price growth in the UK, with an average increase of 5.9% bringing the average price to £217,206.

Scotland follows closely with a 5.4% growth rate, bringing the average property price to £221,711. In Wales, the growth has been more modest at 0.5% annually, with the average house now valued at £228,415.

In England, the most significant growth is seen in the North West, where prices have risen by 2.1%, with the average home priced at £244,329.

“Looking forward, much will hinge on whether the anticipated rate cuts later this year actually occur,” mentioned Karen Noye, a mortgage expert at Quilter. “If they do, we’re more likely to see a gradual improvement in affordability rather than a sudden spike in prices.”

“Stability has resumed, yet enthusiasm remains subdued, which will likely keep price growth in check in the coming months,” she concluded.

Anthony Codling, an analyst at RBC Capital Markets, noted: “While housing affordability is a challenge for many, increasing wages, declining mortgage rates, and relaxed mortgage lending regulations have all played roles in driving up national house prices.”

Although the average price of a UK property has now exceeded £300,000, largely driven by significant increases during the Covid pandemic, growth in recent years has been relatively modest.

Over the past three years, property prices have climbed by 5.7%, adding about £16,000, as higher interest rates and affordability issues have tempered growth.

Between 2020 and 2023, however, house prices surged nearly 19%, an increase of over £44,000, spurred by very low borrowing costs and a pandemic-driven demand for more space, leading many homeowners to relocate.

There are several reasons for the discrepancies in average UK house price estimates provided by Nationwide and Halifax.

Both institutions base their estimates on their own mortgage approvals—approximately 15,000 per month for Halifax and 12,000 for Nationwide.

Transactions made in cash, which account for 30% to 40% of sales, are not included in these figures. Additionally, Nationwide does not factor in buy-to-let transactions.