Story perspectives

UK House Prices Rebound Amid Regional Disparities

2/3/2026

Summary

UK House Prices Rise

UK house prices rose in January 2026, up 1% year over year and 0.3% month over month, reaching £270,873.
The rebound followed a December decline attributed to uncertainty from the Autumn Budget.
Experts, including Robert Gardner of Nationwide Building Society, expect further market growth if affordability improves and rates are cut.
Regional disparities persist, with affordability pressures stronger in the South than in the North and Scotland.

Summary

Knight Frank Projects Growth

Knight Frank projects house prices to rise 3% in 2026 amid borrowing costs and uncertainty.
Improved economic data has increased mortgage rates, potentially supporting price growth if rate cuts occur in 2026.
The jobs market shows weakness, with employment falling and potential impact on rate cuts.
Mortgage approvals fell 9% in December, indicating cautious demand.
Manchester Mayor Andy Burnham's candidacy in the by-election unsettled bond markets amid political uncertainty.

History

Historical Context

The UK housing market experienced a severe recession in 2008, with house prices plummeting by 20% as the Bank of England cut its base rate to 0.5% to stimulate recovery. This crisis, part of the broader Great Recession that began in December 2007, highlighted regional economic disparities that persist today, as rising prices now depend on improved affordability and potential rate cuts.

1 of 3

UK House Prices Rise

UK house prices rose in January 2026, up 1% year over year and 0.3% month over month, reaching £270,873.
The rebound followed a December decline attributed to uncertainty from the Autumn Budget.
Experts, including Robert Gardner of Nationwide Building Society, expect further market growth if affordability improves and rates are cut.
Regional disparities persist, with affordability pressures stronger in the South than in the North and Scotland.

1 / 3