Annual house price growth slowed to 2.4% in the year to December 2025, according to the Office for National Statistics (ONS).

The latest UK House Price Index showed that this rate was down from a revised 2.8% in the 12 months to November, to leave the average price of a UK home at £270,000 at the end of 2025.

In England, the average house price increased by 1.7% in this period to £292,000. The North East was the English region with the highest house price inflation, at 4.6%, although this was down from 7.5% in the 12 months to November. Annual house price inflation was lowest in London, where prices fell by 1% in the year to December, accelerating from a fall of 0.7% in November.

House price growth was greater in both Wales and Scotland in the year to December, where average prices climbed to £215,000 in Wales (5%), and to £191,000 in Scotland (4.9%).

In Northern Ireland, the ONS reported that the average house price was £196,000 in Q4, a total up 7.5% against the period between from October to December a year earlier.

“With the usual two-month lag, these ONS figures reflect December’s market, which was dealing with the aftermath of the Autumn Budget and the seasonal slowdown ahead of Christmas,” commented group distribution director at Chetwood Bank for ModaMortgages and CHL Mortgages, Roger Morris.

“In that environment, a modest monthly dip is not surprising, particularly with annual growth still remaining in positive territory.

“December captured a period of continued hesitation. While expectations were building around the rate cut that was indeed delivered just before Christmas – and the potential for further easing in the new year – many buyers and investors were still weighing affordability and policy shifts before committing.

“This has carried on into the New Year, although there is certainly a more positive sentiment across the property market than there was this time last year, with conditions generally becoming more favourable for buyers.”

Market Financial Solutions CEO, Paresh Raja, added: “Buyer enquiries and sales instructions seem to have picked up across the first seven weeks of the year, suggesting confidence is returning. Future base rate cuts will help boost this confidence further, but there is also a more pragmatic view being taken, with many brokers and buyers not wanting to waste time in getting a deal done.

“The coming months will be telling, and this morning’s CPI data was encouraging – confidence and enquires will need to convert into more transactions, and this will help inject a little more life back in the UK property market this year.”

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