Real estate values in nearby areas see another increase, marking the fifth consecutive month of price increases
UK House Prices Show Modest Growth and Regional Differences
In early 2024, the UK housing market began to show signs of resilience, with steady but modest price gains nationally. However, regional differences are becoming increasingly apparent, with less expensive areas like Northern Ireland and parts of northern England outperforming more expensive regions such as London.
According to Halifax, the average UK house price was around £298,237 in July 2025, showing a 0.4% monthly rise and an annual increase of 2.4%, slightly down from 2.7% in June 2025. Although prices broadly increased, the housing market has remained largely stable with a minor overall price decline (-0.2%) since the start of 2025. This stability can be attributed to factors like mortgage affordability and stamp duty tax changes.
Northern Ireland is the strongest performing market, with annual price growth of around 9.3%, reaching an average price of £214,832. Scotland follows closely with 4.7% growth (£215,238), and Wales posts 2.7% growth (£227,928). In England, the North West and Yorkshire & the Humber posted the fastest annual growth at 4.0%, while London showed weaker performance with just 0.5% annual growth. Some London areas, particularly inner London, experienced price declines amid affordability pressures.
A broader dataset from HM Land Registry confirms similar regional patterns: Northern Ireland leads with about 9.5% annual growth, Scotland 6.4%, Wales 5.1%, England 3.4%, and within England, the North East reports the fastest growth at 6.3%, with the South West lowest at 1.9%.
Recent trends show a seasonal dip in asking prices (1.3% drop in August 2025) and increased market activity, with more sales and listings. A gradual tightening is expected as competitive pricing encourages transactions. Mortgage rates have been easing, improving affordability slightly, with average two-year fixed rates falling to about 4.49% from 5.17% a year prior, supporting buyer confidence in some regions.
However, the downward trend on mortgage rates is showing signs of fading. The UK government's decision to reduce the higher rate of capital gains tax on residential properties from 28% to 24% starting from April 2024 may help landlords and second homeowners sell their properties. This move is expected to have a significant impact on the housing market.
Tom Brown, managing director of real estate at Ingenious, states that the UK property sector remains resilient and popular despite high inflation and higher borrowing rates. Kim Kinnaird, director of Halifax Mortgages, added that the findings suggest a relatively stable start to 2024.
Understanding the underlying subsectors and regional dynamics is key when analyzing opportunities in the UK property market. Any slow-down in sales volumes from homeowners is likely to be offset by increased demand from renters and investors. The institutional housing sector has experienced fewer disruptions compared to the residential sector due to its long-term investment horizon, rental growth, and substantial capital inflows.
The average UK house price in February 2024 was £291,699, an increase of around £1,000 from the previous month. London has the highest average house price of £536,996, up 1.5% compared to the same month the previous year. The North East has the lowest average house price of £171,294, an increase of 4.2% compared to the same month the previous year.
In conclusion, the UK housing market is characterized by steady but modest price gains nationally, with strong regional differences. The outlook depends heavily on mortgage rates, wage growth, and policy changes like stamp duty adjustments. Despite these challenges, the market remains resilient, offering opportunities for investors and homebuyers who understand its complexities.
- The strong performance in less expensive regions like Northern Ireland, with its annual price growth of approximately 9.3%, indicates a shift in the financing priorities for housing in the UK.
- As mortgage affordability improves slightly with reduced average two-year fixed rates, the competitive pricing in regions like the North West and Yorkshire & the Humber is driving increased market activity and transactions in the UK housing market.
