The first figures for 2025 point to ongoing growth in average UK house prices, according to data released by Halifax, Nationwide, and the UK House Price Index (HPI).
Halifax’s latest update showed prices were 3.0% higher in January 2025 compared to the same time last year. Nationwide reported a slightly stronger annual increase of 4.1%.
Dr. David Crosthwaite, Chief Economist at BCIS, commented, “The base rate cuts and tinkering with stamp duty appear to be having an effect on house price growth as buyers rush to complete before the deadline. It will be interesting to see if this momentum is maintained after April.”
Looking at monthly changes, Halifax recorded a 0.7% rise from December 2024 to January 2025, while Nationwide reported a more modest 0.1% gain.
Amanda Bryden, Head of Mortgages at Halifax, acknowledged ongoing affordability pressures, though she noted steady demand for new mortgages and positive lending activity. She said that some of this demand likely comes from first-time buyers hoping to finalise purchases before the stamp duty changes at the end of March. But limited housing supply remains a key issue. This, alongside gradual improvements in affordability, could help support continued price growth through the year.
Nationwide’s Chief Economist, Robert Gardner, echoed concerns about affordability challenges, emphasising that conditions are still tight compared to long-term averages. Even with some improvement, a typical first-time buyer on an average income with a 20% deposit would spend around 36% of their take-home pay on mortgage payments, which remains above the long-term average of 30%, explained Gardner.
The UK HPI, with figures through December 2024, showed house prices up 4.6% on the previous year. However, compared to November 2024, there was a slight drop of 0.1%. These figures often reflect transactions agreed to several months earlier, resulting in some delay in reporting current market conditions.
Regionally, Nationwide’s data pointed to Northern Ireland, the North, and the North West as the areas with the strongest annual growth in the final quarter of 2024. In contrast, East Anglia recorded a far smaller rise of just 0.5% during the same period.
Reference: BCIS
