The average house price in the UK jumped by 4.9% year-on-year in January, which is the highest rate of growth in property prices since February 2023, the Office for National Statistics (ONS) has found.
The non-ministerial department's house price index revealed that this figure was up from a revised estimate of 4.6% in the 12 months to December 2024.
The average house price in the UK stood at £269,000 in January, which is a month-on-month increase of 0.2%.
Head of mortgages at Atom bank, Richard Harrison, said: "The increase reported by the ONS - the highest rate of annual growth since February 2023 - is a great snapshot of the start of this year, with buyers moving quickly out of the blocks in the race to beat the upcoming Stamp Duty deadline. Cheaper mortgage rates are playing their part too."
Across the regions, the ONS found that Northern Ireland was the best performer, with house prices increasing by 9% year-on-year in the final quarter. The average house price in the country stood at £183,259 in January.
The average house price in Scotland (£187,434) and Wales (£209,579) increased by 4.6% and 6% respectively.
The best performing region in England was the north east, which saw annual house prices jump by 9.1% in January. The average property price stood at £161,373.
London continued to have the highest property prices in the country, with the average price increasing by 2.3% year-on-year to £563,657.
Chief executive officer at RAW Capital Partners, Tim Parkes, concluded: "House prices continue to report positive annual growth, and this very much aligns with the market sentiment we are witnessing on the ground. Momentum built towards the end of last year, and activity levels have surged in early 2025. Despite next week’s changes to Stamp Duty thresholds, there's still optimism that the market will continue perform well throughout the spring and summer months.
"Largely, this confidence stems from the Bank of England’s (BoE) rate cutting cycle. While rates were held at last week's meeting, markets anticipate at least two cuts before the year’s end, potentially bringing the base rate down to 4.0%. The economic data the Chancellor will be revealing later today from the Office for Budget Responsibility – announced alongside the Spring Statement – will provide some important clues as to whether the BoE has the scope to proceed with these cuts.
"Regardless of what decision comes next, the sector is actively finding ways to facilitate investment, and today’s positive house price data should provide further encouragement. Lenders and brokers must now work together to ensure investors can access the finance they need to sustain this momentum into Q2 and beyond."
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