UK average house prices top £300,000 for first time, Halifax announces

This marked a monthly rise of 0.7 per cent, reversing the 0.5 per cent fall recorded in December. On an annual basis, prices increased by one per cent.

Amanda Bryden, head of mortgages at Halifax, said the housing market had entered 2026 on a “steady footing”.

Ms Bryden described the £300,000 figure as “undoubtedly a milestone”, but warned that “affordability remains a challenge for many would‑be buyers”.

The last time monthly house price growth exceeded this level was in November 2024, when prices rose by 1.1 per cent.

Despite the headline figure posing difficulties for first‑time buyers, several underlying trends have shifted in their favour.

Wage growth has outpaced property price increases since late 2022, gradually easing affordability pressures.

Ms Bryden said this was “a positive trend for buyers, and the long‑term health of the market”.

She added that most first‑time buyers target smaller properties in areas aligned with their budgets, with parts of northern England frequently offering homes below £200,000.

Karen Noye, mortgage expert at wealth manager Quilter, offered a more cautious view.

Ms Noye said: “Crossing the £300,000 threshold will be welcome news for existing homeowners, but it is yet another nail in the coffin for first‑time buyers already battling stretched affordability.”

Mortgage borrowers are seeing more competitive deals return to the market, with a growing number of products now available below four per cent.

Halifax forecasts property prices will rise between one and three per cent during 2026.

On Thursday, the Bank of England’s Monetary Policy Committee voted to hold interest rates at 3.75 per cent, though the central bank has signalled the possibility of rate cuts later in the year.

Tom Bill, head of UK residential research at Knight Frank, said lenders had pushed mortgage rates higher in recent months as expectations of multiple base rate cuts faded.

“A reduction next month seems likely.”

He added that as inflation comes under control, “demand and activity” should steadily improve.

Lenders have also been targeting first‑time buyers by introducing mortgage products requiring smaller deposits.

Property prices continue to vary significantly across the UK. Northern Ireland recorded the strongest annual growth at 5.9 per cent, followed by Scotland at 5.4 per cent.

London remains the most expensive region with an average property value of £538,600, although prices in the capital fell 1.3 per cent over the past year.

The South East, South West and eastern England also recorded annual price falls of more than one per cent.

Nicholas Finn, managing director at Garrington Property Finders, said the January data represented “a return to business as usual”.

He said estate agents had reported strong activity as buyers who paused their searches during 2025 returned to the market.

Jeremy Leaf, a north London estate agent, said: “There is no question now that the housing market is on the move.”