UK House Price Index: House prices maintain upward trend, but concerns on the horizon

According to today’s from HM Land Registry, UK average house prices rose 5.4% in the year to February 2025, continuing the upward trend in January 2025, which saw a 4.8% increase. The average price of property in the UK in February 2025 was valued at £268,000, remaining in line with the previous month.

The latest regional data continued to show significant regional variations in prices across the UK, with the North West leading the way with the highest annual growth of 8%. In contrast, London house prices only increased in the year to February by 1.7%.

Stacy Eden, Head of Real Estate at 91探花, comments: “Overall prices have maintained the upward trend boosted by a 13% monthly rise in transactions from January 2025 to 108,000 and an annual uptick of 28.1% from February 2024. This was driven by the stamp duty land tax (SDLT) bands reverting to a lower level. It is therefore no surprise that measures of new buyer enquiries and agreed sales turned mildly negative, with RICS reporting a steadying of momentum in house price rises.

“Mortgage approvals also declined slightly in January and February, which alongside house prices in London experiencing negatively monthly growth, highlights affordability concerns in areas with the highest house prices. Monthly house prices in England only increased by 0.3%, a further sign that domestic demand is on affordable properties with more space outside of London, with the UK also seen as less attractive to international investors.”

He added: “The upward trend in house prices may continue in 2025, given the shortage of residential properties in the UK, the ongoing supply and demand imbalance, and expected interest rate cuts. The government says it is committed to hit its annual housing target of 300,000 homes per annum, but industry still considers this unlikely despite removal of red tape in recent months. There are also headwinds, with house price activity driven by the artificially high level of transactions ahead of the 31 March SDLT deadline, with economic volatility also discouraging consumers from getting on the ladder.”