Average UK house prices increased by 4.9%, to £269,000, in the 12 months to January 2025; this annual growth rate is up from 4.6% in the 12 months to December 2024.
This is according to the latest data from the Office for National Statistics which also reveals that average house prices increased to £291,000 (4.8%) in England, £210,000 (6.0%) in Wales, and £187,000 (4.6%) in Scotland, in the 12 months to January 2025.
The North East was the English region with the highest house price inflation in the 12 months to January 2025, at 9.1%. This was up from 6.9% in the 12 months to December 2024.
Annual house price inflation was lowest in London, at 2.3% in the 12 months to January 2025. This was up from 0.4% in the 12 months to December 2024.
Antony Roberts estate agency head of sales Amy Reynolds commented: “The housing market is in a holding pattern. Without another interest rate cut or intervention by the Chancellor in her Spring Statement, transaction levels are unlikely to change. The market remains sluggish, with prices holding up due to a lack of stock.”
SPF Private Clients chief executive Mark Harris said: “With inflation dipping to 2.8 per cent, this is encouraging news as far as future interest rate movements are concerned, and if this downwards trend continues, it will make it easier for the Bank of England to cut rates again sooner rather than later.”
He added: “Another rate reduction would help boost the housing market and wider economy and would be particularly timely with the stamp duty concession coming to an end this month.”
Atom Bank head of mortgages Richard Harrison commented: “The increase reported by the ONS – the highest rate of annual growth since February 2023 – is a great snapshot of the start of this year, with buyers moving quickly out of the blocks in the race to beat the upcoming Stamp Duty deadline.”
This, he argued, was borne out by figures from Rightmove, showing that the level of agreed deals was up by 9% on the same point last year. Even if the passing of the stamp duty deadline led to a material drop in demand, the underlying lack of supply would make any drop in prices unlikely over the coming months.
He added: “Cheaper mortgage rates are playing their part, too. Moneyfacts reported significant momentum in rate falls across February, with two and five-year fixes dropping at the fastest pace in six months. With inflation coming in lower than expected, and the markets now predicting there will be two further base rate cuts this year – potentially from as soon as May – the prospect of mortgage rates heading below 4% will buoy buyers.”
