UK house prices have dropped around £2,000 in the last year despite improved access to mortgages and lower interest rates.
The average price of a home in the four weeks to 6 December was £358,138, which is 0.6 per cent ( £2,059) lower than the same period a year ago, according to Rightmove.
Last year, meanwhile, house prices rose by £5,000.
The chief contributor to lower house prices this year has been uncertainty. While 2025 started with a rush to buy properties before the stamp duty holiday ended, the post-Spring market has been markedly more muted.
Rumours of various property taxes started to swirl as early as August, four months before the Autumn Budget, with chatter of an annual property tax on homes above £500,000.
Potential changes to council tax and stamp duty soon followed, as did rumours of a higher tax on landlords.
Mary-Lou Press, president of the National Association of Estate Agents, said that “economic and political uncertainty has weighed on confidence in the second half of the year”, with “sellers adjusting asking prices and some buyers choosing to pause their home-moving decisions.”
“The larger-than-usual seasonal price fall reflects this caution rather than a lack of underlying demand,” she added.
‘Normality’ to resume in 2026
But normality is expected to resume in 2026, according to Jackson-Stops, with house prices across the UK’s mainstream housing market increasing by between 2 and 3 per cent.
“The first quarter of the year is set to be particularly busy, driven by pent-up demand that built ahead of the Budget and is expected to carry through into next year, reinforcing a spring bounce that should be more pronounced than the long-term norm,” Nick Leeming, chair of Jackson-Stops, said.
Interest rates are expected to settle in the mid-threes next year, while access to mortgages will ease further and higher wages should boost affordability.
“While much of the industry was uneasy about the kite-flying in the run-up to the Budget, the outcome was better than initially feared. This has created the conditions for an unexpected ‘Reeves rebound’, giving buyers the reassurance they needed to proceed with their plans.
“Following almost six years of exceptional volatility driven by Covid, fiscal shocks and political uncertainty, 2026 is now expected to mark a return to a more stable and recognisable housing market,” Leeming added.