BLOGS

A market that refuses to move in a straight line

The latest house price indices tell a familiar story: barely-there monthly changes, modest annual growth, and a lot of hedging from economists about what comes next. Nationwide's figures have swung between small gains and small falls over recent months, while Halifax and the ONS have each recorded their own version of the same theme - a market that isn't falling off a cliff, but isn't convincingly recovering either.

This is the "steadying" the headlines describe. But steadying and stabilising are not the same thing. A market that is genuinely stabilising shows consistent, low-but-positive momentum across multiple indices and regions. A market that's drifting sideways shows exactly what we're seeing now: monthly prints that flip between +0.2% and -0.6% depending on the source and the month, annual growth rates that have more than halved since last year, and forecasters trimming their full-year expectations in real time. The honest answer is that both dynamics are happening at once, just distributed unevenly across the country.

Borrowing costs are still doing the heavy lifting

Mortgage rates are the variable explaining most of the hesitation. Two-year and five-year fixed rates have been oscillating in the 5-5.5% range through 2026, still roughly double where they sat during the low-rate years, even as the Bank of England has held its base rate steady. That gap between base rate and what buyers actually pay reflects swap rate volatility - itself sensitive to global events - rather than domestic monetary policy alone.

For a typical buyer, the arithmetic is unforgiving: even a modest house price fall can be wiped out by a higher mortgage rate, leaving monthly repayments unchanged or worse. That's why transaction volumes and mortgage approvals matter as much as the headline price figure. Zoopla has flagged buyer enquiries down meaningfully year-on-year in some months, even as agreed sales held up better - a sign that a smaller pool of well-financed buyers is still transacting, while more price-sensitive buyers step back.

REalyse data on days-on-market and asking-to-achieved price discounts across postcode districts is one of the clearest ways to see this caution in practice. When buyers gain negotiating leverage, discounts to asking price widen and time on market stretches out - often before it shows up in the average price paid figures that make the headlines.

What this means for pricing strategy

For agents and vendors, this is a market where realistic pricing from day one matters more than usual. Overpricing in a sideways market doesn't just risk a slower sale - it risks a larger eventual discount once a listing has sat unsold for months and buyers start asking why. Comparables drawn from actual sold prices per square foot, rather than optimistic asking prices, are doing more work than they were twelve months ago.

The national average is hiding a genuine regional split

Perhaps the most important nuance in "growth is steadying" is that it's not steadying everywhere equally. Northern Ireland and Scotland have continued to post the strongest annual growth of any UK nation, in some readings running several percentage points ahead of the UK average, while London and the South East have recorded outright annual declines in several recent indices.

That split makes sense once you factor in mortgage sensitivity. Higher-value markets carry larger mortgages, so a given rate rise translates into a bigger increase in monthly repayments relative to income. Areas with lower average prices - much of the North, Scotland, Northern Ireland and Wales - are simply less exposed to that arithmetic, which helps explain why demand and price growth have held up better there even as the UK-wide picture looks flat.

For investors and lenders, this divergence is the more actionable signal than the national average. REalyse's comparables and transaction data at postcode-district level let you see whether a specific local market is genuinely stabilising - sustained small gains, steady transaction counts, shrinking discounts - or just being dragged sideways by national noise while quietly weakening underneath.

Reading past the headline number

None of this means the market is in trouble. Fixed-rate mortgages still shelter the large majority of existing borrowers from the immediate impact of rate moves, and wage growth has continued to outpace house price inflation in most recent readings, which is quietly improving affordability even while headline prices barely move. That's arguably a healthier form of adjustment than a sharp price correction would be.

But it does mean anyone relying on the national average - to set an asking price, underwrite a loan, or size a development scheme - is working with an incomplete picture. The more useful question isn't "is the market stabilising or drifting?" as a single UK-wide answer, but which of those two things is true in the specific postcode, property type and price band you're looking at.

Outlook

Expect the sideways pattern to persist as long as mortgage rates stay in their current band. A sustained move lower in swap rates would likely unlock more of the buyer demand that's currently sitting on the sidelines; continued volatility will keep the market doing what it's done for most of the past year - inching forward in some places, easing back in others, and rewarding anyone who prices and underwrites off granular, local data rather than the national headline.