Average UK house price exceeds £300,000 for first time

Average UK house prices have risen above £300,000 for the first time, according to figures from lender Halifax.

The average price of a UK home increased 0.7% in January, reversing a 0.5% fall in December. The rise pushed the typical property value to £300,077, while annual house price growth accelerated to 1% from 0.4% the previous month.

Amanda Bryden, head of mortgages at Halifax, said: “The housing market entered 2026 on a steady footing, with average prices rising by 0.7% in January, more than reversing the 0.5% fall seen in December. Annual growth also edged higher to 1%, pushing the cost of the typical UK home above £300,000 for the first time.

“While that’s undoubtedly a milestone figure, and activity levels show a resilient market, affordability remains a challenge for many would-be buyers.

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“Broader economic conditions continue to provide some support. Wage growth has been outpacing property price inflation since late 2022, steadily improving underlying affordability. That’s a positive trend for buyers, and the long-term health of the market.

“And we’re now seeing more mortgage deals below 4%. If inflation continues to ease, there should be further gradual reductions as the year goes on.

“All in all, we still think house prices are likely to edge up between 1% and 3% this year.”

Halifax said that despite the record high, house price growth in recent years had been relatively modest compared with the pandemic period. Over the past three years, prices have risen 5.7%, or about £16,000, as higher interest rates and stretched affordability have restrained demand.

That contrasts with the period between 2020 and 2023, when prices climbed by almost 19%, or more than £44,000, fuelled by very low borrowing costs and increased demand for larger homes.

Bryden added: “For first-time buyers the headline numbers can seem daunting, but it’s important to remember that most are looking at smaller properties in areas that reflect their budget.

“Many locations offer far more accessible price points, especially in northern regions where homes can often be found for under £200,000.

“Affordability is still a challenge, but stronger wage growth and falling mortgage rates have helped relieve some of the pressure in recent years. 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.”

Regional differences in house price performance continue to show a widening divide between the north and the south of the UK. In the north, momentum from last year has continued, with demand and price growth remaining strong.

Northern Ireland recorded the biggest annual growth, with prices up 5.9% to £217,206. Scotland followed with a 5.4% rise, taking the average price to £221,711. In Wales, prices rose 0.5% over the year to £228,415.

Within England, the strongest growth was concentrated in the north. Prices in the North West increased 2.1% to £244,329, while the North East saw annual growth of 1.2%, bringing the typical price to £181,198.

Read more: Bank of England holds interest rates at 3.75%

By contrast, prices softened across much of southern England. The South East, South West, London and eastern England all recorded annual declines of more than 1%. As the most expensive parts of the country, these markets tend to be more sensitive to higher borrowing costs and taxes, which can weigh on affordability and confidence.

Nathan Emerson, chief executive of Propertymark, said activity was picking up as more homes came to market and confidence improved among buyers and sellers, helped by growing competition among lenders.

Emerson added that the Bank of England’s decision to hold rates at 3.75% would reassure those considering a move, but warned that affordability remained a major constraint. “To turn improving market conditions into meaningful access to homeownership, buyers need targeted support, a stable lending environment and policies that directly address affordability pressures,” he said.

Karen Noye, mortgage expert at Quilter, said the data showed a market that was “steadily growing, but not quite booming”. She noted that the average price moving above £300,000 would benefit existing homeowners but further stretch first-time buyers.

While competition among lenders was helping to prevent mortgage rates from rising, Noye said affordability pressures and cautious behaviour from buyers and sellers were likely to keep house price growth modest in the months ahead.

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