Despite growth, geopolitical uncertainty could impact inflation and the wider economy, warns Amanda Bryden, Head of Mortgages at Halifax.
9th Mar 20260 651 5 minutes read Simon Cairnes
The housing market has built on its steady start to the year in February, as conditions have improved, but the outlook is being clouded by events in the Middle East, warns Amanda Bryden (main picture), Head of Mortgages at Halifax.
The lender’s latest HPI report shows the average price rose by +0.3%, following an increase of +0.8% in January, and annual growth also picked up to +1.3%, its strongest rate for four months. Since the start of the year, average prices have increased by around £3,000, with a typical property now costing £301,151.
Momentum regainedBryden says: “These latest figures suggest the market has regained some momentum after a softer end to 2025. While industry data for January show a slight easing in new mortgage approvals, overall activity has continued to prove resilient.
“There’s no doubt that affordability remains stretched, supply is constrained, and regional disparities persist. For those without family support, the path to home ownership feels particularly challenging.
“However, conditions have been gradually improving, with easing interest rates and real wage growth helping to support buyer confidence. As ever, timely and expert advice remains key to helping more people achieve their goal of stepping onto the property ladder.
Markets are now anticipating a more gradual path for interest‑rate reductions. If realised, the speed at which borrowing costs ease may be tempered.”
“Looking ahead, geopolitical uncertainties seem set to influence the outlook for inflation and the wider economy. Against that backdrop, markets are now anticipating a more gradual path for interest‑rate reductions. If realised, the speed at which borrowing costs ease may be tempered.”
The data also shows significant regional differences in house price performance remain, with stronger growth in the North and softer conditions in the South.
The North East saw prices rise +3.5% over the year to £181,838, while the North West recorded annual growth of +2.9%, with the average home now costing £246,292.
In contrast, the more expensive southern markets continue to see prices ease. The South Eastled declines, with prices down -2.2% year‑on‑year to £383,834, while London saw average values fall by -1.0% to £538,200.
Industry reaction
Mary-Lou Press, President of NAEA Propertymark
Mary-Lou Press, President of NAEA Propertymark (National Association of Estate Agents):
“The latest Halifax House Price Index confirms that average property values have remained above the £300,000 mark for the second consecutive month, reinforcing the resilience of the UK housing market. Sustained pricing at this level signals continued buyer confidence, despite affordability pressures and wider economic uncertainty.
“However, while rising prices may reflect market strength, they also present clear challenges. Without meaningful support for those stepping onto the housing ladder, higher property values will inevitably push up deposit requirements and borrowing thresholds. As prices remain above £300,000, aspiring first-time buyers face a growing hurdle in saving for larger deposits, making access to homeownership increasingly difficult.”
Nicky Stevenson, Managing Director of Fine & Country
Nicky Stevenson, Managing Director at Fine & Country:
“The early-year momentum has carried into February, with house prices rising by 0.3% on the month, following January’s stronger increase. While this is still modest growth, it’s an encouraging sign that confidence is returning in a steady, sustainable way after the softer end to last year.
“Overall, we are seeing a healthy backdrop for both buyers and sellers as we head towards the spring moving season, with activity usually picking up.
“The regional split highlighted in these figures is worth taking note of. Northern Ireland and Scotland continue to lead the way, and within England, the stronger price growth is still concentrated in northern regions, while pricier southern markets remain softer. That’s a reminder that national headlines only tell part of the story, and local conditions are doing much of the heavy lifting.
“Affordability is still stretched for many, but the conditions for buyers have been gradually improving, with easing interest rates and inflation. For movers, that mix of steadier pricing and improving certainty around borrowing costs should help provide more certainty.
“For sellers, the opportunity is in understanding where demand is most resilient and pricing with the local market in mind. Buyers are active, but they remain value-led, and in a market like this, the right strategy is about meeting demand with accurate pricing and a good presentation of your home.”
Iain McKenzie, CEO, The Guild of Property Professionals
Iain McKenzie, CEO of The Guild of Property Professionals:
“The latest Halifax figures suggest the housing market is continuing to build on the steady momentum we’ve seen since the start of the year. A 0.3% monthly rise takes the average UK property price to £301,151, and while growth remains modest, it’s encouraging to see prices edging upwards again after the softer close to 2025.
“Importantly, price growth is being balanced by a healthier level of supply, with around 6% more homes on the market than a year ago. This is helping to keep values in check and is creating a more sustainable environment for buyers and sellers alike.
“The broader outlook is also improving. Mortgage rates have been gradually easing, with the average five-year fixed rate dipping below 4% for the first time in several years, while lenders are beginning to offer greater borrowing flexibility. Combined with expectations that the Bank of England may reduce the base rate further in the coming months, affordability should continue to improve through 2026.
“Although mortgage approvals dipped earlier in the year, more recent indicators, such as strong sales agreed figures and positive sentiment from surveyors, point to a market that remains resilient and is gradually regaining confidence. With spring traditionally the busiest time for listings and completions, the coming months should provide a clearer picture, but the foundations are certainly in place for steady, sustainable growth as the year progresses.”
Tom Bill, Head of UK Residential Research, Knight Frank
Tom Bill, head of UK residential research at Knight Frank:
“Momentum in the housing market had been rebuilding after November’s Budget and the outlook for mortgages was brighter only a week ago. However, a prolonged conflict in the Middle East would dampen sentiment and delay rate cuts due to rising inflation, which would put downwards pressure on prices. That said, we have seen how quickly interest rate expectations can change this year, and the underlying weakness in the jobs market is one of several reasons that multiple cuts could come back onto the table in 2026, which would support demand. A lot hinges on the length of the conflict.”
Jeremy Leaf, Principal, Jeremy Leaf & Co
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman:
“There is no question some buyers and sellers have been pressing the pause button since the war in the Middle East began. We expect that the button will be pushed a little harder if it seems likely that uncertainties over interest rates and inflation persist for much more than a few weeks.
“Until the end of February, activity had picked up steadily as seen in these and other housing market figures, although inevitably some of that improvement may now begin to slowly unwind. Either way, the availability of stock, particularly from landlords exiting the rental sector, and underlying worries about the economy, mean prices stay subdued and transaction times lengthen.”
Tomer Aboody, MT Finance
Tomer Aboody, Director of specialist lender MT Finance:
“The market saw a bit of a bounce at the end of last year and into this one once the Budget was out of the way. This data shows that people are feeling more confident and the market is in a better place than this time last year.
“Further interest rate cuts will help buyers and encourage activity. However, people are already coming to the conclusion that they either buy in this market or wait, but there is only so long people can put off decisions before they simply have to move because of their situation. Many have been waiting for so long, and can see no government assistance on the horizon in the form of stamp duty reform, etc., so are taking the plunge regardless.”
TagsHalifax house price index 9th Mar 20260 651 5 minutes read Simon Cairnes Share Facebook X LinkedIn Share via Email
