PwC comments on the latest ONS house price data - March 2026

Commenting on the latest ONS house price data, Paige Tao, Economist at PwC UK, says:

“The UK housing market started 2026 on an unexpectedly weak footing, defying expectations of a rebound as the market moved beyond the Autumn Budget uncertainty. House prices fell by 0.3% in January, while annual growth also slowed to 1.3% from 1.9% in December. The slowdown was most pronounced in London, where prices fell by 1.7% year-on-year, the sharpest decline in nearly two years.

“Buyer affordability is getting more stretched, as the loosening in the labour market accelerates. Latest ONS data shows regular pay growth slowed to its weakest pace since late 2020 - a sign that income support for buyers is beginning to fade. At the same time, a backlog of delayed listings returns to the market, leaving sellers facing stiffer competition and increasing pressure on asking prices. 

“Further headwinds are building. Today’s figures come with an important caveat that they only capture activity up to January and do not yet reflect the impact of the Middle East tensions. Higher energy prices are adding to inflationary pressures, prompting markets to scale back expectations of Bank of England rate cuts. Mortgage rates are edging up again, and some low-deposit deals are being pulled, adding challenge in particular to first time buyers. Early-year optimism in the UK housing market for 2026 appears to be fading.”