UK house prices maintained their upward trend in January 2025, with every region across the country experiencing growth in property values.
The North East of England saw the most significant increase, standing out as the top performer with an annual house price inflation rate of 9.1 per cent. This was a noticeable rise from the 6.9 per cent recorded in December 2024, according to recent data published by the Office for National Statistics (ONS).
In January 2025, England’s average house price reached £291,000, reflecting a 4.8 per cent increase (£13,000) compared to the same month in the previous year. This annual rise surpassed the 4.4 per cent growth recorded in the 12 months to December 2024.
The latest data signals a strengthening housing market as the first quarter of 2025 unfolds. Wales, for instance, saw average house prices rise to £210,000, representing a six per cent (£12,000) annual increase. This sharp rise in annual inflation was attributed to contrasting trends, with a 2.1 per cent drop in January 2024 followed by a 0.9 per cent increase in January 2025.
Northern Ireland also posted robust figures, with average prices climbing to £183,000 in the final quarter of 2024. This marked a notable nine per cent (£15,000) year-on-year increase. Meanwhile, Scotland’s housing market continued to strengthen, with average property values hitting £187,000 in January 2025, reflecting a 4.6 per cent (£8,000) annual rise. However, this was slightly lower than December’s growth rate of 5.9 per cent.
In London, house price growth remained modest, recording a 2.3 per cent annual increase in January 2025. Despite being the lowest regional growth figure, it showed an improvement from the marginal 0.4 per cent growth seen in December 2024.
Every region in England reported positive house price inflation, demonstrating widespread market resilience. While the northern regions saw more substantial growth, the South East, East of England, and South West also experienced steady increases, contributing to the overall buoyancy of the national housing market.
Tim Parkes, CEO of RAW Capital Partners, expressed optimism about the UK housing market. He noted that house prices are continuing to show positive annual growth, reflecting the sentiment observed within the market.
According to Parkes, momentum began building towards the end of 2024, and this has carried over into early 2025, with activity levels rising significantly. Despite the upcoming changes to Stamp Duty thresholds, he remains hopeful that the market will continue performing well through the spring and summer months.
Parkes attributed much of this market confidence to the Bank of England’s anticipated rate-cutting cycle. Although interest rates were held steady at the Bank’s recent meeting, financial markets are forecasting at least two rate cuts before the end of the year, which could lower the base rate to four per cent.
He also pointed to the upcoming Spring Statement and economic data from the Office for Budget Responsibility, which the Chancellor is set to unveil. Parkes believes this data could offer key insights into whether the Bank of England has room to proceed with further rate reductions.
Despite the uncertainty surrounding future policy decisions, Parkes remains positive, highlighting the sector’s adaptability. He stressed the importance of lenders and brokers working together to support investors by providing the necessary financing to sustain the current market momentum into the second quarter and beyond.
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