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UK House Prices Stagnate as Rates Hold Steady

12/16/2025

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Center

Mortgage Rates Drop

In December, asking prices fell 1.8% to an average of £358,138.
The Bank of England's Monetary Policy Committee kept rates at 4% while signaling a cut in early 2026 as inflation cools.
The average mortgage rate decreased to 4.90% as the number of available residential mortgage deals rose from 6,924 to 7,054.
House prices showed no growth in November, indicating a stagnant market amid speculation about future taxes and rates.

Left

FCA Eases Mortgage Rules

The Financial Conduct Authority (FCA) is weighing changes to mortgage rules to aid freelancers and gig workers with variable incomes.
The adjustments include flexible payment schedules and greater recognition of rental history in mortgage applications.
The FCA aims to reduce barriers for first-time buyers and those with prior credit issues.
First-time buyers are borrowing a record average of £210,800 as lenders ease affordability tests.

History

Historical Context

In response to the 2008 financial crisis, the Bank of England reduced interest rates to 0.5%, significantly boosting mortgage lending, with the average mortgage amount reaching £150,000. As of 2024, the rate stands at 4% due to inflation concerns, while proposed mortgage rule changes by the FCA aim to enhance homeownership access for first-time buyers, reflecting ongoing economic challenges.

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Mortgage Rates Drop

In December, asking prices fell 1.8% to an average of £358,138.
The Bank of England's Monetary Policy Committee kept rates at 4% while signaling a cut in early 2026 as inflation cools.
The average mortgage rate decreased to 4.90% as the number of available residential mortgage deals rose from 6,924 to 7,054.
House prices showed no growth in November, indicating a stagnant market amid speculation about future taxes and rates.

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