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 reports Nationwide. 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 .
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. With price growth well below the rate of earnings growth and a steady decline in mortgage rate, 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 (with a deposit of 15% or less) reaching its highest level for over a decade.
