If you are planning to buy or sell a house, you will be interested to know what is likely to happen to house prices and whether now is a good time to move. Whether you already own a property or are a first-time buyer, an adjustment in house prices can be beneficial. A drop in price in the area you wish to buy in can save you money, whereas a rise in your current property's value means you can secure a good price and have more capital to invest in your next purchase.
House prices are determined by a number of factors, including:
- The overall health of the economy - The unemployment rate and wage growth both play a part in consumer confidence, which impacts how confident people are to move and how much they are willing to pay.
- Interest rates -The Bank of England sets the base interest rate level and, if it is relatively low, people can afford to spend more on a property as the cost of borrowing is lower. This tends to push house prices up. Conversely, once rates start going up, mortgages become more expensive and house prices tend to fall as fewer people opt to move.
- Supply and demand - Local house prices will be determined by how desirable a particular location is and how many similar properties are available. If, for example, a new housing development is completed, this can reduce the value of properties nearby as there is greater competition for buyers. Conversely, some properties will always command a premium because they are in a sought-after area where the housing stock is limited.
What has been happening to house prices?
There are several reputable sources of data on house prices, including monthly indices that provide information on changes in house prices over the previous month and the preceding 12 months. Below is a summary of each published index.
The UK House Price Index
The UK House Price Index is the most accurate of the various house price indices, as it is calculated based on completed sales, including both cash sales and those with a mortgage. The wide-ranging data is sourced from HM Land Registry and other government sources. However, while it provides a clear picture of what is happening in the housing market, there is a lag in the data being published. The latest available data relates to March 2026.
The latest data shows that the average house price in the UK currently stands at £268,132. House prices have remained unchanged over the 12 months to March 2026.
| UK House Price Index | March 2026 | February 2026 | January 2026 | December 2025 | November 2025 |
|
Monthly change |
-0.4% | 0.1% | -0.3% | -0.7% | 0.3% |
|
Annual change |
0.0% | +1.2% | +1.3% | +2.4% | +2.5% |
|
Average house price |
£268,132 | £267,957 | £268,421 | £270,000 | £271,188 |
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Nationwide House Price Index
The Nationwide House Price Index is calculated based on its own data on mortgage approvals. House prices fell -0.6% in May 2026 (when taking account of seasonal effects), when compared with the previous month. The annual change in house prices currently stands at +1.7%.
Nationwide said "Given the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates, some loss of momentum was to be expected. Indeed, consumer confidence has weakened noticeably since the start of the conflict, with GfK’s headline index falling to its lowest level since late‑2023 in April, with only a marginal increase in May.
"The UK economy and housing market have proved remarkably resilient in recent years. Household finances are solid, with total household debt at its lowest level relative to income for around two decades, and sizeable savings buffers have been built up, though these are not evenly distributed across households.
“Moreover, housing affordability had been improving steadily in recent years due to a combination of income growth outpacing house price growth by a wide margin and a modest decline in borrowing costs.
“While market interest rates have risen in recent months, the impact on affordability has so far been modest. Indeed, swap rates, which underpin fixed‑rate mortgage pricing, remain well below the highs reached in 2023 and are broadly in line with levels prevailing in 2024, implying only a partial reversal of earlier gains.
“This provides some confidence that, if the latest shock passes relatively quickly, and energy prices normalise in the quarters ahead, any near-term softening in the housing market will also prove short lived."
| Nationwide House Price Index | May 2026 | April 2026 | March 2026 | February 2026 | January 2026 |
|
Monthly change in house prices |
-0.6% | +0.4% | +0.9% | +0.3% | +0.3% |
|
Annual change |
+1.7% | +3.0% | +2.2% | +1.0% | +1.0% |
|
Average price |
£278,024 | £278,880 | £277,186 | £273,176 | £270,873 |
Halifax House Price Index
The Halifax House Price Index is calculated from its own database of approximately 300,000 mortgage approvals. Recent data reveals that average house prices fell by 0.1% in April. The latest figures reveal an annual change of +0.4%.
Halifax said "After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook. In particular, higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates – a shift that has already pushed up borrowing costs for many buyers.
“This understandably leads to more caution among some households, with the cost-of-living once again front of mind and extra thought being given to planned property moves. Even so, the housing market continues to display the resilience that has been its hallmark in recent years. While activity is likely to cool in the near term, the underlying picture remains one of relative stability, supported by wage growth that continues to outpace house price inflation.
“Another important factor is that the majority of existing homeowners are on fixed-rate mortgages, meaning they are largely insulated from short term changes in interest rates. A slower pace of house price growth may be disappointing news for existing homeowners. However, for those looking to step onto the property ladder, stable prices are helpful, even if higher mortgage rates mean affordability remains stretched. The average price paid by firsttime buyers has fallen slightly to £238,908, its lowest level so far this year.”
| Halifax House Price Index | April 2026 | March 2026 | February 2026 | January 2026 | December 2025 |
|
Monthly change in house prices |
-0.1% | -0.5% | +0.3% | +0.7% | -0.6% |
|
Annual change |
+0.4% | +0.8% | +1.3% | +1.0% | +0.3% |
|
Average price |
£299,313 | £299,677 | £301,151 | £300,007 | £297,755 |
Rightmove House Price Index
Unlike the other indices that are based on mortgage approval data or completed sales, the Rightmove House Price Index looks at the average asking prices for properties listed on the Rightmove portal. This is a good reflection of sellers' confidence but doesn't clearly demonstrate how many of those properties end up going under offer at a much lower price or, in fact, don't end up selling at all. Its most recent data show that the average asking price rose by 1.2% in May 2026, however, prices were 0.3% down when compared to the same period last year.
Rightmove said "The number of homes for sale is at its highest level for this time of year since 2015, and almost a third of listings of existing homes for sale are seeing prices reduced. In light of this, new sellers need to price carefully at the beginning of the process to avoid longer selling times. Homes that didn’t need a price reduction sold in just 36 days, compared with 127 days for those that needed a reduction".
“Despite ongoing pressures on the cost of living and higher mortgage rates in recent months, sales agreed were down by just 4% compared with this time last year, and were 2% higher than the same period in 2024. This suggests that many movers are going ahead with their plans, where affordability allows, even in a period of uncertainty around global events. The first-time buyer market told a similar story, with sales down 4% compared with the stronger 2025 market and only 1% lower than 2024. This suggests that first-time buyers have not yet been heavily impacted by recent mortgage rate rises, despite affordability being an important factor for this group. Affordability is being helped by lower pricing by new sellers. Typical first-time buyer homes saw the smallest average monthly price increase (+0.3%) and remained 0.7% lower than at this time last year“.
| Rightmove House Price Index | May 2026 | April 2026 | March 2026 | February 2026 | January 2026 |
|
Monthly change |
1.2% | 0.8% | 0.8% | 0.0% | 2.8% |
|
Annual change |
-0.3% | -0.9% | -0.2% | 0.0% | 0.5% |
|
Average asking price |
£378,304 | £373,971 | £371,042 | £368,019 | £368,031 |
What is driving the change in house prices?
The housing market has been tumultuous over the past 5 years, with the pandemic having a direct impact on house prices. Initially, there was a slump as the country entered into lockdown for the first time in March 2020 before a massive resurgence from June 2020, when society began opening up again. A key driver was the introduction of a temporary stamp duty holiday on 8 July 2020, which offered buyers a saving of up to £15,000 on their tax bill when purchasing a house. This acted as a stimulus, ironically driving house prices up by an average of £15,409 between June and November 2020, according to figures from the Halifax, in effect wiping out the stamp duty saving.
The main stamp duty holiday ended at the end of June 2021, with a tapering until the end of September 2021, during which time buyers could save a maximum £2,500 off their bill. There was a corresponding uptick in house prices in the run-up to the deadlines for the end of each of these phases and, overall, there was double-digit annual growth across 2021. This was bolstered by historically low mortgage rates, as well as the reintroduction of higher loan-to-value mortgage deals.
However, the mini-Budget presented by former Chancellor Kwasi Kwertang on 23rd September 2022 sent shock waves through the mortgage market resulting in a rapid increase in mortgage interest rates. In August 2024, the Monetary Policy Committee (MPC) voted to cut interest rates to 5.00%, having kept rates at 5.25% for the previous seven meetings (September, November, December, February, March, May and June). In November 2024, rates were cut by 0.25% and they were cut by a further 0.25% in February, May, August and December 2025, before being held in January, March and April 2026. It means the Bank of England base rate currently stands at 3.75%.
Markets had predicted another rate cut before the end of the year, and many major lenders had been pricing it in when releasing their latest mortgage deals; however, the situation in the Middle East has prompted a complete reversal. The Bank of England has warned of the possibility of six further rate hikes, with the sentiment being that rates are likely to remain 'high for longer'.
We recently reported that a number of major lenders have recently eased mortgage affordability checks, allowing mortgage applicants to borrow more. Additionally, lower mortgage costs will likely mean that there will be more prospective purchasers able to secure a mortgage, thus putting upward pressure on house prices.
Is now a good time to move house?
Estate agents have warned that there is a 'decade-high' number of homes currently on the market, and a third of homes already on the market have had their asking price reduced by an average of 7%. With house prices still at elevated levels, we could see them trending downwards over the coming months, which, if you are a first-time buyer or moving to a new area, could save you money if you decide to wait. If, however, you are a mover and have to sell your current property, it may pay to make the most of the tail-end of this recent house price boom.
How do I know what my property is worth?
While it is useful to consider the broader market trends for the UK, it's also important to work out what is happening in your local area if you are planning to buy or sell a property. There can be a great deal of variation in the price of a house on one street compared to the same style of house on an adjacent street, so it pays to do your homework. Good sources of information include:
- Property websites - Sites such as Rightmove and Zoopla have features that give you an estimate of what your house is worth based on its sales history and what other local properties have sold for. These tools are not completely accurate but give you a good starting point to work out how much you could reasonably expect to sell your house for
- Land registry data - It is possible to access the sold prices for all the properties in your local area, sorted by how long ago the property sold. This gives a good indication of what properties are actually selling for, compared with the asking prices that they are being marketed at.
- Estate agent - A good local agency with properties on its books similar to the one you are trying to sell will be able to give you the best idea of what you are likely to be able to sell your property for. It is a good rule of thumb to get valuations from a few different agents as there could be some variation in the valuations they provide. Read our article: How to find the best & cheapest local estate agent in seconds.
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