The latest Halifax House Price Index report for February 2025 shows that UK house prices remained largely stable over the month, dipping by just -0.1%, following a +0.6% increase in January. The average property price now stands at £298,602, a marginal decrease of £213 from the previous month. Annual house price growth held firm at +2.9%, reflecting resilience in the property market despite ongoing economic pressures.
A Closer Look at UK House Prices and Housing Market Trends
Amanda Bryden, Head of Mortgages at Halifax, noted that February’s figures highlight the delicate balance in the UK housing market. With speculation around a last-minute surge in mortgage applications ahead of stamp duty changes, demand that had been brought forward may now be fading.
“Growth in first-time buyer property prices eased to +2.4%, whereas home-mover price inflation accelerated to +3.7%. Despite affordability challenges, market activity remains strong, suggesting prices will continue rising at a slower, more measured pace in 2025,” Bryden explained.
Regional Breakdown: Where Are Prices Rising Fastest?
Most UK regions experienced a slowdown in house price growth, but some areas bucked the trend:
- Scotland saw house prices increase at the fastest pace in 13 months, with annual growth rising to +3.8% (£213,014 average price).
- Northern Ireland retained the strongest annual growth in the UK at +5.9%, with an average property price of £205,784.
- Wales recorded a +2.8% year-on-year increase, with homes now valued at £226,811.
- Yorkshire and Humberside led England with a +4.1% annual increase, pushing average prices to £216,130.
- London, while still the most expensive region, saw annual price growth slow to +1.6%, bringing the average house price to £545,183.
Housing Market Activity: Are Buyers Still Active?
Data from HMRC and the Bank of England suggests housing market activity remains strong but slightly eased in early 2025:
- UK home sales totalled 95,110 in January, down -1.0% from December but +14.4% higher year-on-year.
- Mortgage approvals for house purchases decreased slightly by -0.5%, but were +18.3% higher than January 2024.
- RICS Residential Market Survey showed buyer demand stabilising, with new instructions increasing for the seventh consecutive month.
Market Outlook: What Lies Ahead for UK House Prices?
Despite a slight monthly dip, the housing market remains resilient. The ongoing housing supply shortage, coupled with sustained demand, suggests that property prices will likely continue to rise gradually throughout 2025. First-time buyers may face continued affordability challenges, particularly with higher mortgage rates and cost-of-living pressures. However, the easing of price growth and strong competition among lenders could create opportunities for buyers. For home movers, the increase in house price inflation reflects continued confidence in the market, with many taking advantage of stable conditions to upsize or relocate.
Final Thoughts: Is Now a Good Time to Buy?
With house prices stabilising and market activity holding steady, now could be a good time for buyers to enter the market. However, with mortgage rates still a key factor, prospective homeowners should carefully assess affordability and explore the best deals. As the year progresses, the market will likely remain price-sensitive, driven by economic factors, interest rates, and government policy. Buyers and sellers should stay informed and seek expert advice to navigate the evolving property landscape.
If you are a homeowner or looking to purchase a new property, we at Oportfolio are here to help. Give us a call or drop us a message today to speak directly with an experienced mortgage advisor.
