I’ll be honest — I’m always a little surprised when this question still comes up.
“Are house prices about to crash?”
Given what the data has been telling us consistently over the past few years, it’s a fair question to ask why this narrative refuses to go away. And the answer, more often than not, comes down to headlines rather than hard evidence.
Back in early 2023, the predictions were certainly dramatic. With interest rates rising after Liz Truss’s departure, several major forecasters warned of a sharp downturn. Halifax suggested prices could fall by 8%, Savills by 10%, and Nomura went as far as 15%.
Those forecasts made great headlines. But three years on, the reality looks very different.
According to the Land Registry, UK house prices are now 3.93% higher than they were in January 2023. Here in Lancaster, prices have risen by 5.18% over the same period. That’s not a market heading for collapse — it’s a market that has adjusted, absorbed higher rates, and remained remarkably steady.
And yet, as we entered 2026, I started hearing the same concerns again. A few reports late last year highlighted short-term monthly price dips and quickly jumped to the familiar question: is this the start of a crash?
Before we go any further, it’s worth remembering one simple truth — bad news sells.
House prices don’t move in straight lines. Over the past three years, Lancaster has seen plenty of ups and downs. In August 2024, prices were falling at around 1.1% annually. By March 2025, they were rising at 3.7%. The most recent figures show prices sitting around 0.6% higher than a year ago.
This is exactly why looking at one month in isolation can be misleading. When you step back and look at the broader trend, the story is one of stability rather than shock.
One of the most useful indicators we follow comes from Denton House Research, which tracks price per square foot at the point a property goes under offer. This data leads the Land Registry figures by roughly five months and has an exceptionally strong correlation.
Over the last three years, price-per-square-foot figures show a 3.59% increase, closely mirroring the Land Registry’s 3.93% rise. In other words, the underlying value of homes has been quietly holding up.
Five months ago, the average UK price per square foot was £341.85. Today, it’s £346.02. That movement points to modest growth rather than any form of collapse.
Locally, confidence is also reflected in activity levels. In the second half of 2022, 601 Lancaster homes sold subject to contract. In the same period in 2025, that figure rose to 643. Buyers are still active, and transactions are still completing.
What has changed — and this is where today’s real challenge lies — is competition.
There are more homes coming to market. Choice for buyers has increased, both nationally and here in Lancaster. That doesn’t mean prices are crashing, but it does mean sellers are no longer operating in the same low-supply environment we saw a few years ago.
In early 2026, new listings are running well ahead of pre-pandemic levels, and sales are keeping pace. This is not oversupply — it’s a more balanced market. But it does mean that homes need to be priced sensibly and presented well from day one to stand out.
Mortgage rates are also playing their part. After peaking above 6% in late 2022, rates have settled and are expected to ease further this year. Five-year fixed rates are now available below 4% in some cases, which is helping confidence return.
Employment remains stable too. Unemployment is around 5.1%, wage growth is steady, and there’s no sign of the widespread financial stress that typically precedes forced sales.
This is why comparisons to 2008 don’t hold up. Lending rules are far tighter, buyers have been stress-tested properly, and the reckless borrowing of the past simply isn’t present today.
Yes, parts of central London have seen notable price falls — but those areas are very specific markets that experienced extraordinary growth fuelled by overseas investment. What happens there does not reflect Lancaster.
So could a crash still happen? In theory, yes. But it would take a perfect storm — rising unemployment, surging interest rates, restricted lending and mass forced sales. None of those conditions are in place.
For Lancaster, 2026 looks far more like a normal, competitive market than a fragile one. Prices are steady, buyers are active, and the biggest challenge for sellers is standing out in a market with more choice.
Ignore the headlines. Trust the data. And if you’re selling this year, focus on getting the fundamentals right from the start.
Those are my thoughts — and I suspect the numbers back them up.
Thanks for reading
Michelle x