Average UK house prices increased by 2.4%, to £270,000, in the 12 months to December, down from 2.8% in the 12 months to November, the latest UK House Price Index from the Land Registry shows.
In 2025 average house prices increased by 1.7% in England, 5.0% in Wales, and 4.9% in Scotland.
The North East was the English region with the highest house price inflation, at 4.6%, in the 12 months to December, although down from 7.5% in the year to November.
Annual house price inflation was lowest in London. Prices fell by 1.0% over the year, compared with a fall of 0.7% in November.
Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: “Although a little dated, it reflects the period just before and after the Budget so demonstrates considerable buyer and seller resilience at a time of economic uncertainty which we also noticed on the ground.
“Looking forward, December’s modest reduction in interest rates and the prospect of further cuts over the next few months have given the market a lift. However, the amount of stock available and likelihood of even more choice given the increasing number of appraisals, will keep any price increases firmly in check.”
Roger Morris, group distribution director at Chetwood Bank for ModaMortgages and CHL Mortgages, said: “Today’s figures underline why context is so important when assessing headline data. 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. 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. And 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.
“With markets increasingly pricing in further easing through 2026 and a base rate closer to 3% by year-end, the foundations are in place for this confidence to strengthen as the year progresses. The focus now should be on translating improving sentiment into consistent momentum, supported by competitive products and the service brokers and borrowers need to move forward with confidence.”
Paresh Raja, CEO of Market Financial Solutions, commented: "The property market undoubtedly took some positive steps forward late last year, with the Autumn Budget proving more modest than scaremongering ahead of the speech had suggested, and then the Bank of England cutting the base rate just before Christmas. As such, while the annual house price growth in 2025 was modest compared to the highs many have become accustomed to, the picture looks brighter today than it did six, or even three, months ago.
"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.”
Lee Williams, national sales manager at Saffron for Intermediaries, added: “The final house price data for 2025 shows values continuing to edge upwards, extending the gradual recovery seen over recent months. Encouragingly, earnings growth has outpaced house price inflation, helping affordability improve. As a result, the price-to-earnings ratio for first-time buyers has eased further, pointing to a meaningful shift in accessibility for many entering the market.
"Lenders have also entered the new year in a competitive mood, with a wave of new products and criteria enhancements following a busy end to 2025 for innovation. This renewed focus on flexibility is helping to unlock demand and is laying the foundations for a steadier, more confident market in the year ahead.”
