Swift increase in home prices witnessed in Halifax, reaching the highest point since the new year's commencement
UK House Prices Continue to Rise, but Regional Differences Persist
The UK property market is experiencing moderate annual price growth, with an average property now valued at approximately £269,000, according to recent data. This marks a slight acceleration from the 3.6% growth rate reported in April 2025.
Northern Ireland leads the way with the highest annual growth at 9.5%, followed by Scotland with 6.4% growth. England, on the other hand, has seen a 3.4% annual increase, reaching an average of £290,000. The North East region within England recorded the largest annual rise of 6.3%, while the South West saw the lowest annual growth at 1.9%.
London, despite having an average price of around £566,000, has experienced more modest growth with a 2.2% annual increase. However, the city saw a 1.4% monthly price decline in May 2025.
Monthly price changes also highlight recent momentum. Yorkshire and the Humber had a strong monthly gain of 2.4%, while the North East, West Midlands, East Midlands, North West, and East of England regions also saw monthly rises around 2% or slightly above.
The changes in Stamp Duty Land Tax (SDLT) on 1 April 2025 likely affected house price movements and transaction volumes around that date. Regional economic conditions, demand-supply imbalances, and affordability constraints also contribute to variation in price growth across regions.
London and the South East, despite having higher average prices, experience lower growth or small declines possibly due to saturation in very high-value markets and changing demand dynamics. Northern regions and Midlands, on the other hand, show faster growth, likely reflecting relatively stronger affordability and renewed demand.
First-time buyers in London pay an average of £483,000, lower than former owner-occupiers (£708,000), and experience smaller price gains compared to other regions.
Looking ahead, the outlook for UK house prices depends on factors such as the Bank of England's interest rates, the supply and demand balance within the housing market, and affordability pressures. Experts predict at least one more interest rate cut this year, which could further stimulate the market.
The government's new permanent 95% mortgage guarantee scheme will help first-time buyers and home movers buy a home with a deposit of just 5%. However, challenges remain for those looking to move up or onto the property ladder.
In summary, the UK housing market shows moderate annual price growth nationally, with regional disparities reflecting local economic factors, tax changes, and affordability. Northern regions are generally experiencing stronger increases than London and the South East, where price growth is slower or weakening slightly.
Regional Breakdown
- In Northern Ireland, the average house price is £214,832, and house prices have risen by 9.3% over the past year.
- The South West and London and the South East continue to see moderate growth, with prices rising by just 0.2% and 0.5% respectively over the past 12 months. London remains the most expensive part of the UK with an average home cost of £539,914.
- House prices in Wales have risen by 2.7% to an average of £227,928.
- House prices have risen by 0.4% in July, the biggest monthly increase since the start of the year.
Sources: [1] Halifax House Price Index [2] Rightmove House Price Index [3] Nationwide House Price Index [5] Office for National Statistics (ONS) [4] Knight Frank UK Residential Research
- The regional disparity in the UK housing market is reflected in the different interest rates experienced by homebuyers in various regions, as northern regions may benefit from lower rates due to the stronger growth compared to London and the South East.
- Potential investors or first-time buyers should consider the current trend in the housing market, such as the effects of interest rates on affordability, and the potential impact on property prices in different regions before making an investment decision, especially in the housing markets of northern regions and the Midlands, which show faster growth.
- The ongoing moderation in the national average property price in the UK, combined with the differential growth between regions, presents an opportunity for those interested in investing in real-estate or buying a property, as it may be advantageous to focus on areas with robust housing markets and faster growth, like Northern Ireland or the North East of England, which have consistently performed well in the housing market.
