The average cost of a UK home passed £300,000 for the first time in January, as house prices increased at the fastest rate since November 2024.
Data released by Halifax showed that house prices rose 0.7% month on month last month, the fastest rate since a 1.1% increase was recorded in November 2024. On an annual measure, prices grew 1%.
Halifax, which is part of Lloyds – Britain’s biggest mortgage lender – estimates that the average price of a UK home hit a record £300,077.
However, Nationwide, which also releases monthly estimates on house prices, puts the average cost of a home at a much lower £270,873.
The growth marks a significant bounceback after a sluggish run-up to Christmas, when the average price of a UK home fell by 0.5% month on month. Halifax has revised this figure down from 0.2%.
“The housing market entered 2026 on a steady footing,” said Amanda Bryden, the head of mortgages at Halifax. “While [£300,000] is undoubtedly a milestone figure, and activity levels show a resilient market, affordability remains a challenge for many would-be buyers. All in all, we still think house prices are likely to edge up between 1% and 3% this year.”
Last month, Nationwide predicted that the average UK house price would rise by between 2% and 4% this year.
Homebuyers have been buoyed up by a string of cuts to the base rate by the Bank of England’s monetary policy committee, with the most recent coming in December.
On Thursday, the bank maintained the rate at 3.75% over concerns of persistent inflation, which rose for the first time in five months in December, to 3.4%.
However, the narrow 5-4 vote split has led analysts to factor in further cuts in the coming months. The committee has cut rates six times since mid-2024.
On a regional basis Northern Ireland continues to show the strongest house price in the UK, with average prices rising at 5.9% annually to £217,206.
In Scotland, the rate of growth is running at 5.4%, with the average price of a property at £221,711. In Wales, there has been only 0.5% annual growth, with the average home costing £228,415.
In England, the strongest growth is in the north-west, at 2.1%, where an average home costs £244,329.
“Looking ahead, much will depend on whether the expected rate cuts later this year materialise,” said Karen Noye, a mortgage expert at Quilter. “If they do, the impact is more likely to be gradual support for affordability rather than a sudden jump in prices.
“Stability has returned, but enthusiasm has not and that is likely to keep price growth contained over the months ahead.”
Anthony Codling, an analyst at RBC Capital Markets, said: “While housing affordability is stretched for many, rising wages, falling mortgage rates and the easing of mortgage lending limits have all contributed to rising house prices at a national level.”
While the average price of a UK property has topped the £300,000 mark for the first time, in part fuelled by sharp rises during the Covid pandemic, growth in recent years has been modest.
Property prices have risen by 5.7%, or about £16,000, over the last three years as higher interest rates and affordability issues have contributed to slower growth.
However, between 2020 and 2023 house prices climbed almost 19%, over £44,000, as ultra-low borrowing costs and the pandemic-driven “race for space” led to homeowners looking to relocate.
There are a number of factors that contribute to the difference in average UK house price estimates produced by Nationwide and Halifax.
Both produce the estimates based on their own mortgage approvals, about 15,000 a month for Halifax and 12,000 for Nationwide.
Cash transactions are also not included, with 30% to 40% of sales in cash. Nationwide also does not include buy-to-let transactions.e