House prices across the United Kingdom have officially broken through the £300,000 barrier for the very first time, according to the latest data released by Halifax. The mortgage lender's figures reveal a resilient property market that has begun the new year with significant momentum, though experts caution this pace may not be sustained throughout 2026.
Historic Milestone Reached
Halifax's January house price index shows a monthly increase of 0.7%, adding £2,139 to the value of the typical British home. This brings the average property price to £300,077, marking a 1% annual increase and representing the first time ever that average values have surpassed the £300,000 threshold.
Remarkably, house prices rose more in January 2026 alone than they did throughout the entirety of 2025, when the average home increased by just 0.4% over twelve months.
Expert Analysis and Future Projections
Amanda Bryden, head of mortgages at Halifax, acknowledged the milestone while tempering expectations for continued rapid growth. 'While that's undoubtedly a milestone figure, and activity levels show a resilient market, affordability remains a challenge for many would-be buyers,' Bryden stated.
She highlighted several positive economic indicators supporting the market:
- Wage growth has been outpacing property price inflation since late 2022
- More mortgage deals are now available below 4% interest
- If inflation continues to ease, further gradual rate reductions are expected
'All in all, we still think house prices are likely to edge up between 1 per cent and 3 per cent this year,' Bryden concluded.
Market Momentum Building
Nicholas Finn, managing director of Garrington Property Finders, interpreted Halifax's data as the clearest indication yet that the property market is regaining the momentum lost at the end of 2025. 'With mortgage rates falling in January and set to fall even further in coming months as the Bank of England sounds increasingly dovish, borrowing costs are becoming less of a barrier to aspiring buyers,' Finn explained.
He identified two key factors driving renewed demand:
- Discretionary buyers, especially sensitive to mortgage costs, are returning to the top of the market
- Many renters who postponed home-buying plans during last year's uncertainty are reconsidering their options
'It's early days, but this is an encouraging start to the year and we could be on track for a strong spring as demand accelerates,' Finn added optimistically.
Regional Disparities Emerge
Despite the national milestone, significant regional differences in house price performance have become increasingly pronounced. The north of England and Scotland have shown particular strength, while southern regions have experienced declines.
Northern and Scottish Growth:
- North West: Prices increased 2.1% to £244,329 annually
- North East: Recorded 1.2% annual growth to £181,198
- Scotland: Prices rose 5.4% to an average of £221,711
Southern and Welsh Stagnation:
- South East, South West, London and Eastern England all saw annual declines exceeding 1%
- Wales experienced minimal growth of just 0.5%, with average homes costing £228,415
Historical Context and Affordability Challenges
While the £300,000 milestone represents a psychological breakthrough, property prices have actually moved very little in recent years compared to the dramatic increases witnessed during the pandemic period. Over the past three years, prices have risen just 5.7% (approximately £16,000), which Halifax attributes primarily to higher interest rates and stretched affordability.
This contrasts sharply with the three years from 2020 to 2023, when prices climbed nearly 19% (more than £44,000), driven by ultra-low borrowing costs and the pandemic-era 'race for space.'
Anthony Codling, a housing analyst at investment bank RBC Capital Markets, summarized the current situation: 'Whilst 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 national level.'
He added an important regional qualification: 'The spring selling season has got off to a good start. However not all regions are equal and house prices in the South East, South West and London are lower than they were one year ago.'
The UK property market thus enters 2026 at a historic crossroads, having broken through a significant price barrier while facing persistent affordability challenges and growing regional disparities that will shape the market's trajectory in the months ahead.
