UK house price growth ended 2025 on a noticeably softer note, with momentum easing as the year drew to a close. While the market avoided a sharp downturn, the slowdown reflected a combination of affordability pressures, seasonal effects, and shifting buyer sentiment.
Annual house price growth slipped to 0.6% in December, down from 1.8% the month before. On a monthly basis, prices fell by 0.4% after seasonal adjustment, marking the weakest annual growth rate recorded since April 2024.
UK House Price Growth Overview (End of 2025)
| Measure | Figure |
| Annual house price growth (December 2025) | 0.6% |
| Annual growth (November 2025) | 1.8% |
| Monthly change (seasonally adjusted) | -0.4% |
| Weakest annual growth since | April 2024 |
Despite the softer figures, the housing market showed underlying resilience throughout the year. Mortgage approvals remained broadly in line with pre-pandemic levels, suggesting that buyer demand has not disappeared, even as confidence remains subdued.
One of the defining features of 2025 was the distortion caused by changes to stamp duty earlier in the year. A rush of activity ahead of the April deadline boosted transactions in the spring, followed by quieter conditions through the summer and into the autumn.
Affordability conditions gradually improved as the year progressed. Earnings growth continued to outpace house price inflation, while mortgage rates edged lower compared with their peaks in 2023 and early 2024. This helped to ease pressure on buyers, particularly those entering the market for the first time.
First-time buyers played a larger role than average, supported by improved access to higher loan-to-value mortgage products. Low-deposit lending reached its highest level in more than a decade, providing additional support to market activity despite higher borrowing costs compared with the pandemic period.
Regional performance varied significantly across the UK, with most areas still recording modest annual growth. East Anglia was the only region to see a fall in prices over the year, while Northern Ireland once again led the market.
Annual House Price Growth by UK Region
| Region | Annual Change |
| Northern Ireland | +9.7% |
| Wales | +3.2% |
| Scotland | +1.9% |
| England (overall) | +1.2% |
| East Anglia | -0.8% |
Northern Ireland’s strong performance marked the third consecutive year it has topped the UK growth rankings. However, average prices in the region remain around 5% below their 2007 peak, highlighting the longer-term affordability gap compared with the rest of the UK.
England continued to see a clear north–south divide. Northern regions delivered stronger growth, while southern areas struggled to gain momentum as higher prices and stretched affordability weighed on demand.
England: Regional Price Performance
| Area | Annual Growth |
| North West | +3.5% |
| Northern England (average) | +2.3% |
| Southern England (average) | +0.6% |
| London | +0.7% |
London remained one of the weakest-performing parts of the market. While prices did edge higher over the year, growth remained well below the national average, reflecting long-standing affordability challenges and changing buyer preferences.
House price performance also differed by property type. Larger homes continued to attract stronger demand, while flats underperformed for another year.
House Price Growth by Property Type
| Property Type | Annual Change |
| Semi-detached | Strongest growth |
| Detached | Strong growth |
| Terraced | Modest growth |
| Flats | -0.9% |
Flats, particularly in city centres and London, have struggled for more than a decade. Higher service charges, maintenance costs and ground rents, combined with post-pandemic lifestyle changes, have continued to dampen demand.
Looking ahead to 2026, market conditions are expected to improve gradually rather than dramatically. With wages continuing to rise faster than house prices and mortgage rates forecast to ease further, buyer confidence is likely to strengthen.
Market Outlook for 2026
| Forecast | Expectation |
| Expected price growth | 2% – 4% |
| Affordability trend | Improving |
| Mortgage rates | Gradually easing |
| Rental market impact | Supply pressure likely to persist |
Recent Budget changes are not expected to have an immediate impact on the sales market. However, higher taxes on landlords may reduce buy-to-let investment, potentially limiting rental supply and keeping upward pressure on rents.
In summary, while UK house price growth lost momentum at the end of 2025, the market remains fundamentally stable. Modest growth, improving affordability, and resilient demand suggest a steadier — rather than weaker — outlook for the year ahead.
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