UK house price growth slowed to 0.6% in December, from 1.8% in November, data from the latest Nationwide House Price Index shows.
The only region to see an annual decline was East Anglia, where prices fell by 0.8% (this was the first annual decline in a region since Q2 2024, which coincidentally was also East Anglia and a fall of 0.8%).
At the other end of the spectrum, Northern Ireland continued to outpace the rest of the UK by a wide margin, with prices increasing by 9.7% over the year.
This was more than five times faster than the 1.7% recorded in the UK as a whole (in Q4) and nearly three times higher than the 3.5% recorded in the next strongest region (North West). This strong performance mirrored that in the border regions of Ireland over the same period.
Despite these significant price gains, house prices in Northern Ireland are still around 5% below the all-time high recorded in 2007, while UK prices are almost 50% higher over the same period. As a result, the price of a typical home in Northern Ireland is currently around 79% of the UK average price, while in 2007 it was around 25% higher.
Scotland broadly matched the wider UK trend in 2025 with annual house price growth of 1.9%. Meanwhile, Wales saw a slight increase in annual house price growth to 3.2% and was the only other part of the UK, apart from Northern Ireland, to see stronger house price growth in 2025 than in 2024.
England saw a further slowing in annual house price growth to 1.2%, from 1.6% in Q3. Average prices in Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands) were up 2.3% year on year, with the North West (which includes areas such as Cheshire, Lancashire & Greater Manchester) the top performing region in England – with prices up 3.5% year on year.
A tale of resilience
“UK house prices ended 2025 on a softer note, with annual price growth slowing to 0.6%, from 1.8% in November, the slowest pace since April 2024,” said Robert Gardner, Nationwide’s Chief Economist.
“The high base for comparison can partly explain the slowdown (annual price growth was a solid 4.7% in December 2024), although prices fell by 0.4% month on month, after taking account of seasonal effects.”
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, said Gardner.
“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,” he said.
“With price growth well below the rate of earnings growth and a steady decline in mortgage rates, affordability constraints eased somewhat, helping to underpin buyer demand. Indeed, the first-time buyer share of house purchase activity was above the long run average, supported by easier credit availability, with the share of high loan to value lending (i.e. with a deposit of 15% or less) reaching its highest level for over a decade.”
What to expect in 2026
Looking ahead, Nationwide expects housing market activity to strengthen a little further as affordability improves gradually (as it has been in recent quarters) via income growth outpacing house price growth and a further modest decline in interest rates.
“We expect annual house price growth to be broadly in the 2% to 4% range next year,” said Gardner. 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.”
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