- Prior +0.3%
- House prices +0.6% vs +1.2% y/y expected
- Prior +1.8%
It’s a soft end to the year with the average house price ending at £271,068 for December. But overall, UK housing market activity has remained resilient all through 2025. One has to remember that household and consumer sentiment in the UK has been relatively subdued for much of the year and that is not to mention that mortgage rates are also still holding well above the Covid pandemic lows.
Nationwide notes that:
“House prices evolved broadly in line with our expectations. Annual price growth slowed steadily from 4.7% at the end of 2024 to 2.1% in the middle of 2025 and then to 1.8% in November. As a result, prices were close to the all-time high recorded in the summer of 2022 as the year drew to a close.”
Looking to next year, they see house prices strengthening a little further with expectation that “annual house price growth is to remain broadly in the 2 to 4% range”. The reasoning for that being:
“The changes to property taxes announced in the Budget are unlikely to have a significant impact on the market. The high value council tax surcharge is not being introduced until April 2028 and will apply to less than 1% of properties in England and around 3% in London. The increase in taxes on income from properties may dampen buy-to-let activity further and hold down the supply of new rental properties coming onto the market, which could in turn maintain some upward pressure on private rental growth.”
