Fresh calls for government intervention in the housing market have emerged after the latest UK House Price Index showed slowing price growth and falling monthly values, adding to concerns about weakening demand.
Figures for January 2026 showed the average UK property price rose just 1.3% year-on-year to £268,000, while prices fell by 0.3% on a monthly basis, highlighting what analysts described as a market struggling to gain momentum.
Audit, tax and consulting firm RSM UK said the figures point to the need for policy changes to help buyers and support development, warning that rising mortgage costs, weak economic growth and tax pressures are all weighing on activity.
Recent HMRC data has already shown a sharp drop in transactions compared with a year earlier, while developers continue to face higher build costs, planning delays and regulatory burdens that are affecting scheme viability.
RISING COSTS
The firm said the combination of flat house price growth and rising costs risks making new housing delivery harder at a time when supply remains below target.
Stacy Eden (main picture, inset), Partner and National Head of Real Estate at RSM UK, says: “Today’s house price index figures show static growth over the last three years, a concerning picture given wage inflation over that period. This places the market in a challenging position for navigating the year ahead, with mortgage rates on the rise and expected hikes in inflation.
“Weak UK economic growth, paired with concerns around the UK economy and the effects of sluggish real-wage growth are damaging the housing demand, alongside tax rises. This is demonstrated by the 20% or so reduction in transactions reported by HMRC on a non-seasonally adjusted basis for the month to January 2026.”
TIGHTER RULES
And he adds: “With the impacts of geopolitical volatility and headwinds expected to persist in the coming months, measures such as stamp duty reforms, or even further government support for first time buyers, would go a long way to re-stimulate the market and remove some of the negative pressures around purchasing property.”
RSM also warned that tighter rules in the private rented sector and higher taxation on landlords are discouraging investment, further limiting housing supply.
