According to the latest nationwide indices from Nationwide and Halifax, annual price growth at the end of 2025 was modest and lower than earlier in the year.
Nationwide showed annual price growth easing back to 0.6% while Halifax went one step further and recorded a small annual rise of just 0.3%, alongside a 0.6% monthly fall. On the face of it that looks like a market losing momentum.
But that misses what really happened last year. This wasn’t a market that rolled over. It was a market that stopped being propped up by panic, tax deadlines and emergency rate cuts and then quietly proved it could stand on its own.
Both lenders, and indeed the likes of trade body Propertymark and property portal OnTheMarket used the same word in their commentary: resilient. And they’re right.
We began 2025 with households still rattled by inflation, mortgage rates roughly three times higher than their post-pandemic lows and consumer confidence stuck in the doldrums.
Stamp duty changes then blew a hole through the spring, pulling demand forward into March and leaving the following months looking artificially weak.
If ever there was a year when the housing market could have cracked, this was it.
Yet approvals stayed near pre-Covid norms. First-time buyers didn’t disappear. High loan-to-value lending reached its highest share in over a decade. In other words, people kept buying homes even when it wasn’t particularly comfortable to do so.
The softening we saw towards the end of the year was largely mechanical. Nationwide’s Robert Gardner was candid about the “high base” effect: prices were up 4.7% in December 2024, so 2025 was always going to look weaker in year-on-year comparisons. Strip that out and what you’re left with is a market that drifted sideways rather than one that fell over.
The regional picture also tells a story that doesn’t fit the national gloom.
Northern Ireland was once again the standout performer, with prices up close to 10% on Nationwide’s numbers and more than 7% on Halifax’s. Not so much a bubble but more like a catch-up. Prices there are still below their 2007 peak and around 20% below the UK average, despite incomes not being 20% lower. Value still matters in a market where buyers are paying more attention to what they get for their money.
Elsewhere, the familiar north-south split widened further. Northern England delivered annual growth of more than 2%, while the South limped along at around 0.6%.
London barely moved on Nationwide’s figures and fell more than 1% on Halifax’s. East Anglia, once a pandemic darling, was the only UK region to show a decline.
Not so much random but a slow unwind of the Covid-era housing sugar rush.
During lockdowns and work-from-home mania, buyers overpaid for space, gardens and commutes they didn’t really understand.
As normal working patterns returned and borrowing costs rose, those premiums started to look stretched.
And London and the South East, where prices were already high and flats dominate the stock, have borne the brunt.
Flats were down again in 2025, while houses of all shapes and sizes kept edging up. Over the last decade, flat prices have risen less than half as much as terraces – somewhat extraordinary for a country where we are constantly told we are running out of space.
The problem here is not supply. It’s confidence. Leasehold concerns, service charges, cladding scandals, opaque freeholders and spiralling maintenance bills and help to buy have made flats feel financially risky in a way they never used to.
When mortgage affordability is tight, buyers don’t want open-ended liabilities. They want something they can control. A front door and a garden now look safer than a managing agent and a sinking fund.
The result is a divided market with modest house price growth sitting alongside a quiet but grinding repricing of flats.
So, can we see blue skies on the horizon?
Mortgage rates are drifting down. Wages, though slowing, are still rising faster than house prices.
Halifax’s house price-to-income ratio is at its lowest for more than a decade. Credit availability, especially at higher loan-to-value levels, is loosening.
None of this points to a boom. But it does point to a market that no longer needs emergency support to function.
Nationwide thinks prices will rise between 2% and 4% this year. Halifax is a little more cautious at 1% to 3%. So realistically we’re looking at 3% tops but most likely 2.5%.
Not enough to make anyone rich but enough to quietly confirm that the long-predicted crash has once again failed to turn up.
The information contained within was correct at the time of publication but is subject to change.
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