UK property prices end 2025 at record high with modest growth expected in 2026

After a year shaped by policy deadlines, tax speculation and shifting borrowing conditions, UK property prices ended 2025 in a stable position, with house prices hitting a new high. A closer look at the data below reveals how the market adjusted over the year and where price momentum now stands.

According to the latest data from the Halifax House Price Index, annual UK property price growth stood at +0.7 per cent at the end of 2025, which was broadly in line with expectations. This limited uplift was enough to push the average UK property price to a new high of £299,892, an increase of £2,221 compared with a year earlier.

Changes to stamp duty thresholds in the spring heavily influenced market activity across the UK property market. A surge in completions followed as buyers rushed to beat the deadline, making March one of the busiest months on record. However, this spike did not translate into sustained property price inflation, with transaction levels soon returning close to pre-pandemic norms.

The second half of 2025 was marked by caution as speculation around potential tax rises ahead of the Autumn Budget weighed on sentiment. Despite this, both UK property prices and activity remained broadly stable, suggesting a market that has become more resilient to short-term policy noise.

Regionally, performance varied widely. Northern Ireland recorded the strongest annual growth, with property prices rising by +8.9 per cent, while Greater London saw the largest decline, with average prices falling by -1.0 per cent.

Looking further back, the slowdown in UK property price growth is evident. Over the past three years (2022–2025), the typical UK property price has increased by +4.7 per cent, or £13,565. This compares with a rise of +21.7 per cent (£50,974) over the previous three-year period from 2019 to 2022.

Looking ahead, Halifax expects UK property prices to rise modestly in 2026, forecasting growth of between 1 per cent and 3 per cent, based on economic projections from Lloyds Banking Group. While wage growth is expected to slow and unemployment may edge higher, lower interest rates and easing inflation are anticipated to gradually improve purchasing power across the UK property market.

Commenting on the figures, Amanda Bryden, Head of Halifax Mortgages, said: “While affordability remains challenging, the picture has improved compared to recent years, driven by a combination of above-inflation wage growth, lower interest rates and some expansion of eligibility criteria from mortgage lenders.”

December update: seasonal dip in UK property prices

In addition to the end-of-year figures, Halifax has just released the data for December 2025, showing a modest monthly decline in UK property prices, reflecting the typical seasonal slowdown at the end of the year. Despite this short-term softening, the wider picture remains unchanged.

Industry sentiment supports the suggestion that the December dip is seasonal rather than structural. Verona Frankish, CEO of Yopa, commented: “With Autumn Budget uncertainty now behind us and interest rates falling just before Christmas, buyer confidence has strengthened, and we are already seeing a notable uplift in market activity. This renewed momentum should provide support for house prices as we move through 2026.”