Sammie Ellard-King
I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.
The average price of a house in the UK has risen above £300,000 for the first time, as buyers returned to the market after a December dip.
House prices increased by 0.7% month-on-month between December and January, bringing the average price of a home to £300,077, according to new data from Halifax.
The January rise reversed December’s 0.5% fall, giving house price growth a strong start to the new year.
Annual Growth Still Low
The annual rate of house price growth edged higher to 1% between January 2025 and January 2026, up from 0.4% in December.
That means house prices have risen by just £3,000 over the past year – a far cry from the rapid growth seen during and after the pandemic.
The average price of a house has risen by 5.7%, or around £16,000, over the past three years. This is significantly lower than the growth between 2020 and 2023, which saw prices increase by almost 19%, or around £44,000.
House price growth between 2023 and 2026 was restricted as higher interest rates and stretched affordability pushed down demand.
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Good News for Homeowners, Bad News for Buyers
Amanda Bryden, head of mortgages at Halifax, said the “housing market entered 2026 on a steady footing,” with activity levels showing the market has stayed resilient.
While rising house prices will be welcome news for those who already own a house, it’s less good news for those trying to become homeowners.
With increasing prices, those attempting to get onto the housing ladder are having a more difficult time putting together enough savings for a deposit, and seeing more of their income spent on mortgage payments.
Will Affordability Improve?
Bryden says there are signs that affordability could increase this year, even while house prices shoot over the £300,000 milestone.
“Affordability is still a challenge, but stronger wage growth and falling mortgage rates have helped relieve some of the pressure in recent years,” she said.
“We expect that improvement to continue in 2026, meaning that with the right support and advice, home ownership should become a realistic prospect for more would-be buyers.”
Wage growth has been outpacing property price inflation since late 2022, steadily improving underlying affordability.
Regional Divide Deepens
Large price differences between UK regions have become more pronounced in recent years as the divide between house prices in the north and south has deepened.
Northern regions and the devolved nations have consistently experienced strong house price growth, while some regions in the south have seen price growth stall or even reverse.
Northern Ireland leads the way with 5.9% annual growth. The typical house there now costs £217,206.
Scotland saw 5.4% growth, bringing the average price to £221,711.
In England, the North West saw prices increase by 2.1% to £244,329, while the North East saw 1.2% growth to £181,198.
Not a single southern region saw the average price of a home increase in 2025.
The two worst-performing regions were the South West and South East, where average prices fell by 1.6%.
Greater London also suffered shrinking prices. The average house there is now 1.3% lower than a year ago at £538,600.
Full Regional Breakdown
| Region | Average Price | Annual Change |
|---|---|---|
| Northern Ireland | £217,206 | +5.9% |
| Scotland | £221,711 | +5.4% |
| North West | £244,329 | +2.1% |
| North East | £181,198 | +1.2% |
| Yorkshire & Humber | £217,516 | +0.9% |
| East Midlands | £246,433 | +0.6% |
| Wales | £228,415 | +0.5% |
| West Midlands | £261,817 | +0.4% |
| Eastern England | £332,366 | -1.2% |
| Greater London | £538,600 | -1.3% |
| South East | £385,086 | -1.6% |
| South West | £303,625 | -1.6% |
What Does This Mean for First-Time Buyers?
Bryden acknowledges that while the headline £300,000 figure may be daunting for first-time buyers, most will be looking for smaller properties at a price point significantly lower than the average.
“Many locations offer far more accessible price points, especially in northern regions where homes can often be found for under £200,000,” she said.
The data backs this up. In the North East, the average house costs £181,198 – nearly £120,000 less than the UK average.
Meanwhile, in Greater London, the average is £538,600 – almost £240,000 more than the national average.
Halifax expects affordability to continue improving in 2026 as wage growth outpaces house price growth and mortgage rates fall.
But for first-time buyers looking at the £300,000 milestone, the takeaway is clear: location matters more than ever.
If you’re buying in the North East, Northern Ireland, Scotland or the North West, homes are significantly cheaper and prices are growing. If you’re buying in London or the south, prices are higher and falling – but affordability is still a major challenge.
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Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
