House price growth across Britain has shifted into negative territory in 2026, marking only the second time in a decade that average monthly price increases have declined. This change reflects a cooling housing market influenced by economic uncertainty, affordability challenges, and geopolitical factors.

Current Trends in House Price Growth

Research from estate agency Yopa reveals that average house prices across Britain have fallen by 0.22% per month so far this year, compared with a modest growth rate of 0.15% per month in 2025. This decline contrasts with the generally positive trend seen over the past decade, where average monthly growth rates have mostly remained above zero.

The analysis covers data from England, Wales, and Scotland between 2016 and 2026, illustrating how market momentum has evolved. While prices continued to rise during 2025, the 0.15% monthly increase was notably lower than the 0.24% recorded in 2024. The peak year within this period was 2021, when prices surged by an average of 0.63% per month, buoyed by pandemic-driven demand and the stamp duty holiday.

Market Direction and Influencing Factors

Verona Frankish, Yopa’s chief executive, emphasises the importance of viewing house price growth over an annual timeframe to understand market direction more clearly. She states, “House price growth can often be erratic and heavily influenced by seasonality, economic conditions and wider buyer sentiment.”

Frankish notes that, aside from 2023, when average monthly growth briefly dipped below zero, the past decade has seen predominantly positive price trends. However, she adds, “Whilst the market entered 2026 on a relatively positive footing, a combination of economic uncertainty, affordability pressures and wider geopolitical instability has since caused momentum to soften and, as it stands, house prices are currently trending downwards across Britain.”

Regional Variations in Price Decline

The downward trend in house prices is not uniform across the UK. England has experienced the smallest monthly average decline at 0.16%, while Wales has seen a sharper fall of 0.75% per month. Scotland’s prices have also declined, with an average monthly drop of 0.45%. These variations highlight differing regional market dynamics and the varying impact of economic pressures.

Higher borrowing costs and affordability challenges are key drivers behind these falls, alongside broader economic uncertainty. Sellers have increasingly had to adjust asking prices to attract buyers, reflecting a shift in market power and sentiment.

What this means for landlords

For landlords considering whether to buy, sell, or refinance, the current negative growth environment signals a need for caution and strategic planning. Falling prices may affect rental demand and property values, while affordability pressures could influence tenant behaviour and rental income stability.

Landlords should closely monitor market conditions and economic indicators, as the softening momentum could persist if economic and geopolitical uncertainties continue. Adjusting investment strategies to account for potential price declines and changing buyer sentiment will be essential in navigating this evolving landscape.

Source: Based on reporting from Property118

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