UK house prices report from Halifax
The UK housing market kicked off 2025 on a high, with house prices increasing by 0.7% in January 2025, following a slight -0.2% dip in December, according to the latest Halifax House Price Index. The report reveals that the average property price now stands at a record £299,138, showing the market’s resilience despite wider economic pressures. However, while UK house prices continue to rise, the annual rate of growth has slightly eased to 3.0%, down from 3.4% in December. This suggests that while demand remains strong, some cooling factors may be at play as affordability constraints, mortgage rates, and economic uncertainty continue to influence the market. In this article, I will go through the key facts and data from Halifax’s report and give a bit of an insight on what this could mean.
Regional UK House Prices: Northern Ireland Leads Growth, North East Gains Momentum
Halifax’s data highlights significant variations in house price growth across the UK. While most regions have seen a slowdown in the pace of price increases, some areas continue to see robust growth. Northern Ireland remains the strongest-performing region in terms of annual house price growth. However, January’s rate of 5.9% represents a slowdown from December’s 7.3%. The average property price in the region is now £205,473.
- Wales recorded a 3.6% annual increase, with homes now averaging £227,397.
- Scotland saw modest annual growth of 2.4%, with properties now worth an average of £210,690.
- England’s North East has overtaken the North West as the region with the strongest annual house price growth in England, recording a 5.2% increase. The average house price in the North East now sits at £178,696.
- London remains the UK’s most expensive housing market, with the average home valued at £548,288, marking an annual increase of 2.8%.
- This is the first time since September 2023 that the North West has not led the annual house price growth table in England, highlighting shifting regional trends.
Housing Market Activity on the Rise
Despite the easing of annual growth rates, broader market activity remains strong. Key indicators suggest increased buyer interest and transaction volumes:
- UK home sales increased in December 2024, with 96,330 seasonally adjusted (SA) transactions, representing a 2.9% rise from November.
- Over the last three months of 2024 (October to December), home sales were up 5.6% compared to the previous quarter.
- On a year-on-year basis, home sales were a substantial 18.7% higher than December 2023.
- Mortgage approvals increased by 0.7% in December 2024, with 66,526 new approvals, according to the latest Bank of England figures.
- The RICS Residential Market Survey for December 2024 reported that while new buyer enquiries fell slightly (+5% from +11%), agreed sales improved (+7% from +1%), showing signs of a strengthening market heading into 2025.
My Thoughts
The latest Halifax figures confirm what we’ve been seeing on the ground – the UK housing market remains incredibly resilient, even amid economic uncertainties. The fact that house prices have hit a record high despite slightly lower annual growth suggests that demand is still strong, particularly in regions like the North East where affordability is better than in the South.
What’s particularly interesting is the shifting dynamics. The North East overtaking the North West in annual price growth for the first time since 2023 is a sign that buyers are prioritising affordability and value. London’s steady increase also indicates that the capital remains a key player, but not at the explosive growth levels we’ve seen in past years. With mortgage approvals rising and transaction volumes picking up, it’s clear that confidence is returning to the market. However, buyers should remain mindful of potential changes in mortgage rates and stamp duty adjustments that could influence their purchasing decisions in the months ahead.
What Does This Mean for Homebuyers in 2025?
For prospective buyers, the current market presents both opportunities and challenges. While house prices are at record levels, the slower pace of annual growth could provide breathing room for those looking to enter the market.
If you’re planning to buy a property in 2025, it’s essential to have the right mortgage strategy in place. With interest rates and house prices fluctuating, expert guidance is crucial to securing the best deal. At Oportfolio Mortgages, our experienced mortgage advisors are here to help you navigate the changing landscape. Whether you’re a first-time buyer, moving home, or looking to remortgage, we can help you find the best mortgage for your needs. Contact us today to start your journey towards homeownership.
