House price growth slowed at the end of 2025 – Nationwide

UK house price growth lost pace at the end of 2025, with annual inflation slowing to 0.6% in December from 1.8% a month earlier, Nationwide’s latest index reveals.

The average home is now worth £271,068 and the slowdown marks the weakest annual rate since April 2024.

In comparison, prices were rising at 4.7% in December 2024.

Nationwide is predicting that annual house price growth next year will be in the 2% to 4% range.

Housing market is ‘resilient’

The lender’s chief economist, Robert Gardner, said: “Despite the softer end to the year, the word that best describes the housing market in 2025 overall is ‘resilient’.

“Even though consumer sentiment was relatively subdued, with households reluctant to spend and mortgage rates around three times their post pandemic lows, mortgage approvals remained near pre-Covid levels.”

He added: “Stamp duty changes that took effect at the beginning of April created volatility through the spring and summer.

“Activity spiked in March as purchasers brought forward transactions to avoid paying additional tax and this led to some softness in the following months.

“However, the underlying picture was little changed as demand held up well throughout.”

East Anglia prices fall

Quarterly data for the final three months of the year shows most areas recording modest annual increases, though East Anglia stands apart as the weakest performer, with prices down 0.8% over the year.

Northern Ireland again outperformed all other parts of the UK as prices rose 9.7% in 2025, extending its lead for a third consecutive year.

It also exceeded the 1.7% average growth recorded across the UK in the final quarter.

Scotland broadly tracked the national trend, with annual growth of 1.9%, while Wales saw prices up 3.2%.

North outperforms the south

In England, annual growth eased to 1.2% as northern regions outperformed the south, with average prices across the North and Midlands rising 2.3% year on year.

The North West led the way at 3.5% but southern England saw growth of just 0.6%.

London posted a muted increase of 0.7% over the year.

Semi-detached homes recorded the strongest gains, with prices up 2.4%, detached houses followed at 2.2% and terraced homes rose 1.8%.

Flats continued to lag, with values falling 0.9% over the year.

Property sector reaction

Nathan Emerson, the CEO of Propertymark, said: “Aspiring and current homeowners will no doubt have felt reassured heading into the end of the year, with falling inflation and base rates improving affordability and helping more buyers consider their next move during 2026.

“Given the number of policy and economic changes the housing market experienced throughout 2025, including legislative updates, mortgage rate fluctuations, and the Autumn Budget, a period of price stability is an encouraging outcome.”

Iain Mckenzie, the CEO of The Guild of Property Professionals, said: “The latest Nationwide HPI figures show the market ending 2025 on a softer note, with annual price growth easing to 0.6%, but this should be seen more as a gentle cooling than any loss of underlying resilience.

“Price growth remained remarkably steady throughout the year despite pre-Budget uncertainty and a notable increase in the number of homes for sale.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Although the level of house price increases of the past few months has not been maintained, this is not surprising given the huge uncertainty surrounding the contents of the Budget which prevailed in the final quarter of last year at least.

“Improvements in affordability, prompted by recent falls in inflation and interest rates, as well as relief the Chancellor’s measures were not as painful as many feared, have helped to stir buyers and sellers from their seasonal hibernation.”