UK House Prices Show Weakest Growth: What This Means for Real Estate Investors and Businesses in Oman
LONDON: British house prices increased by a modest 0.3% over the year to December, marking the slowest annual growth since March 2024, as economic and tax uncertainties continued to affect the housing market, according to mortgage lender Halifax on Thursday.
In December alone, prices declined by 0.6% compared to the previous month, following a 0.1% drop in November. This was below economists’ expectations, who had anticipated a 1.1% year-on-year rise and a 0.2% monthly increase, as surveyed by Reuters.
Halifax attributed the December decrease to late-year uncertainties, suggesting this trend might begin to reverse. The lender also noted that lower mortgage rates combined with modest price growth have improved affordability for first-time buyers. As a result, the house price-to-income ratio has fallen to its lowest level in over a decade.
Despite this improvement, some analysts remain cautious. Matt Swannell, chief economic adviser at the EY Item Club, warned that easing labor market conditions could slow wage growth, limiting potential for significant mortgage rate reductions in 2026.
The Bank of England reduced interest rates from 4% to 3.75% in December, with market expectations of one or two additional quarter-point cuts later this year.
These findings align with Nationwide’s data, which showed a 0.4% monthly price decline in December and the weakest annual growth since April 2024.
Looking ahead, Halifax forecasts annual house price growth between 1% and 3% in 2026. A Reuters poll from December projected a 2.8% price rise for next year, following a 2% increase in 2025.
Regionally, London experienced a 1.3% decrease in house prices over the past year, whereas Northern Ireland saw the strongest growth at 7.5%.
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The slowdown in UK house price growth amid economic and tax uncertainties signals potential caution for Omani investors eyeing international property markets, emphasizing the need to diversify and hedge risks. Opportunities may arise in more affordable financing conditions, but smart investors should monitor wage growth and interest rate trends closely to navigate potential volatility in 2026.
