UK house prices slipped again in December, offering landlords and buy-to-let investors a more affordable entry point as borrowing costs continue to normalise. Halifax’s latest figures show values edging down after months of subdued activity, though regional resilience remains uneven across the UK.
House price trends and what they mean for landlords
Halifax reported a 0.6% fall in December, following a 0.1% decline in November, placing the average UK property at £297,755, its lowest level since June. Annual growth slowed to 0.3%, signalling a cooling market but not a correction.
Amanda Bryden, Head of Mortgages at Halifax, said the housing market ended 2025 “subdued”, but overall activity remained broadly in line with pre-pandemic levels. She notes that reducing mortgage rates and a wider range of higher loan-to-value products are already supporting early-2026 confidence.
Softer prices combined with improving lending conditions create a rare alignment: lower acquisition costs and stabilising finance rates. The house-price-to-income ratio reaching a decade-low also hints at renewed first-time-buyer movement – something that often stimulates churn and rental demand.
Regional house price performance: strong North, weak South
Northern Ireland continues to outperform every UK nation and region, posting 7.5% annual growth with average values at £221,062. Scotland followed with 3.9% growth, and Wales at 1.6%.
In England, the North East led with 3.5% annual growth to £181,798, followed by the North West at 2.8%, where average prices stand at £245,323.
London, however, recorded a 1.3% annual fall to £539,086, reflecting a year in which higher-value postcodes experienced deeper corrections. Jonathan Hopper, CEO of Garrington Property Finders, said the capital saw “flatline or falling prices throughout 2025”, with some prime areas experiencing double-digit declines.
For investors, the regional divide reinforces a long-running theme: yield performance tends to be strongest in lower-value northern markets, where price stability and rental demand remain robust.
Market activity: approvals, sentiment and early-2026 outlook
Bank of England data shows 64,530 mortgage approvals for November, down 0.7% month-on-month and 2.1% lower year-on-year, reflecting both caution and year-end seasonality.
Meanwhile, the latest RICS survey highlights subdued sales sentiment, with new buyer enquiries at -32% and agreed sales at -23%, the weakest reading since late 2023.
Propertymark CEO Nathan Emerson said affordability pressures remained a drag, noting “consumer caution” tied to inflation and wider economic uncertainty. He emphasised that sustainable improvement depends on rate stability and tackling the UK’s long-standing undersupply of homes.
Hopper adds that December was “the low point in a year of two halves”, suggesting stronger momentum in early 2026 as mortgage rates fall below 4% and buyers previously deterred by Budget speculation re-enter the market. Estate agents and portals have already reported a “busy start to the year”.
For landlords, the combination of price softening, improved affordability, and increased buyer activity may set the stage for modest capital growth – Halifax forecasts 1-3% house-price growth in 2026.
Editor’s view
A quieter end to 2025 masks a more interesting backdrop for landlords: falling prices, improving finance options and a clear regional divide in growth potential. With yields more attractive in several northern markets and capital values stabilising elsewhere, 2026 could reward investors willing to act while sentiment remains cautious.
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance.
Published: 8 January 2026
Sources: Halifax House Price Index; Bank of England mortgage approvals; RICS Residential Market Survey; Propertymark; Garrington Property Finders.
Related reading: UK house price growth slows to 0.6 percent at end of 2025, says Nationwide
