UK house prices slid at the end of 2025, according to Halifax, with the average property losing ground in December and the market showing mixed fortunes across regions. Buyers and sellers faced a quieter month, but analysts say the wider picture for the year remained steady and may brighten in 2026.
Halifax data: monthly and annual movement in December 2025
Halifax reported a fall of 0.6% in its house price index for December. That left the typical UK home priced at £297,755, down by £1,789 from November.
The December result capped a slower year-end trend. November had seen a smaller dip of 0.1%, and annual growth cooled to 0.3% in December, down from 0.6% the month before.
How regions performed: winners and laggards in the UK property market
Performance varied sharply by nation and region. Some areas recorded solid gains while others, notably London, weakened over the year.
- Northern Ireland: strongest annual rise at 7.5%. Average price: £221,062.
- Scotland: annual increase of 3.9%. Average price: £217,775.
- Wales: modest gains of 1.6%. Average price: £230,233.
- North East (England): best performing English region with 3.5% growth. Average price: £181,798.
- North West (England): rose 2.8%. Average price: £245,323.
- London: the weakest, with prices falling 1.3% across 2025. Average price remains around £539,086.
Market activity in 2025: steady compared with pre-pandemic levels
Halifax noted that overall housing market activity through 2025 stayed close to pre-pandemic patterns. Transactions and demand did not collapse, even if prices dipped late in the year.
Mortgage rates, policy changes and what they mean for buyers
Lenders began trimming rates after a recent Base Rate cut. That eased borrowing costs and expanded options for people with smaller deposits.
- Falling rates are expected to lift buyer interest.
- More low-deposit deals are reappearing on the market.
- Halifax forecasts a gentle rise in prices of 1–3% over the year ahead.
First-time buyers: a slightly easier entry
The house price to income ratio improved and reached its lowest point in more than a decade in December. That offers some relief for new buyers eyeing the market.
Expert views: cautious optimism from industry figures
Property professionals described December’s dip as partly seasonal and not necessarily a signal of wider weakness.
- Some agents argued that a post-Budget calm and falling rates should prompt renewed buyer confidence.
- Others warned of potential headwinds, including slower wage growth and a flattening jobs picture.
Industry voices flagged that confidence has started to return and activity was already increasing heading into 2026.
Risks to the outlook and factors to watch
- Employment trends and wage growth will influence affordability.
- Further shifts in Bank Rate could alter mortgage pricing.
- Regional economic performance will keep driving divergent local markets.
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