The UK housing market has edged past a symbolic £300,000 average price mark but new analysis suggests the milestone masks a far more cautious reality.
Halifax’s latest House Price Index places the average property at £300,077 in January, up 0.7% on the month. Annual growth, however, stands at just 1.0%, with quarterly growth at 0.1%.
Meanwhile, the Bank of England is holding rates at 3.75% and the wider economy grew by only 0.1% in the final quarter of 2025.
The UK property market is currently in a state of slow stabilisation rather than any kind of meaningful boom.
PSYCHOLOGICAL MILESTONE
While we’ve technically hit a psychological milestone with average prices, it reflects a slow upward crawl in a low-supply environment rather than a surge in market health.
On the ground, GDP growth is effectively flatlining at 0.1%, and that economic stagnation is keeping a firm lid on consumer confidence.
Here are five things we’ve learned so far.
The £300k headline shouldn’t be mistaken for a boom
Look past the headlines and the trend’s still measured: Halifax shows modest growth in January. That’s a world away from the 2020 – 2023 surge, when prices climbed nearly 19%; the past three years have been far calmer by comparison. Halifax itself describes January as a ‘steady footing’ rather than a surge.
Confidence is improving, but only slightly
We are seeing a slight pulse in buyer enquiries as they edge up from recent lows, but overall sentiment remains fragile and activity is still quite subdued. RICS’ January balance for new buyer enquiries stood at -15, still negative even if it’s improving.
Mortgage costs are still the day-to-day obstacle
The primary hurdles right now are the twin weights of interest rates and policy uncertainty. Rightmove puts the average two-year fixed rate at 4.29%, down from 5.03% a year ago, but still a barrier for many.
Decisions are taking longer, because the backdrop feels uncertain
Political noise and budget uncertainty are causing longer decisions, with many investors and buyers simply pausing their commitments until the path is clearer.
HMRC shows seasonally adjusted residential transactions were roughly flat month on month in December (100,440 vs 100,500 in November), which fits the cautious tone.”
Landlords are not waiting around
We also have the looming Renters’ Rights Act forcing landlords to rethink their terms and pricing well before the new rules even kick in.
RICS flagged landlord instructions still deep in negative territory at over -30% in its latest survey, underlining how jittery the private rental sector remains.
And here are five things likely to happen by Spring.
A gradual thaw, not a resurgence
A small rate cut should help affordability and bring more buyers back into the fold, and transactional volumes will probably tick up as confidence slowly returns. We’re seeing agents turn cautiously optimistic, with RICS expectations now back in positive territory, but this won’t be a sudden surge, more a slow defrost.
Recovery from a low base
It’s important to see this for what it is: a modest recovery from subdued levels. Both Halifax and Nationwide are pencilling in low single-digit growth, around 1% to 4%, for the year, which is steady rather than spectacular. Spring activity will feel busier because we’re coming off such a quiet winter.
Affordability is improving, but it’s still tight
Mortgage rates have come down, to around 4.29% now versus over 5% a year ago, and wages are finally catching up with prices. That’s tangible progress, but we’re still a long way from the sub-3% fixes people got used to before 2022.”
Expect a two-speed market
The regional split is only going to widen. Northern markets are outpacing London by miles, and this demonstrates that the buyer sentiments are inclined towards value more than postcodes right now. Spring will reinforce that, with people stretching for space and affordability.
This is going to be a ‘meet in the middle’ market
Spring will bring a pick-up, but sellers testing top dollar asking prices will sit, and buyers holding out for bargains will be frustrated. The smart move is to be realistic: if the numbers work, transact. If they don’t, wait, but don’t expect a crash or a boom to bail you out.
