House price growth ended 2025 at a 20-month low, Nationwide data shows.
The latest Nationwide House Price Index shows annual UK house price growth slowed from 1.6% to 0.6% between November and December 2025.
This was the slowest pace since April 2024.
Average prices also fell 0.4% on a monthly basis during December to £271,068.
Northern Ireland was the best performing area for house price growth for the third year running, with prices up 9.7% in 2025.
East Anglia was the weakest performing region, with prices down 0.8% over the year.
What the latest Nationwide House Price Index means for the housing market
Commenting on the figures, chief economic for Nationwide, said: “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.”
Gardner said affordability constraints eased in 2025, helping to underpin buyer demand.
He added: “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.”
What will happen to the housing market in 2026?
Gardner said housing market activity is expected to strengthen “a little further” in 2026 as affordability improves gradually via income growth outpacing house price growth and a further modest decline in interest rates.
He added: “We expect annual house price growth to be broadly in the 2% to 4% range next year.
“The changes to property taxes announced in the Budget are unlikely to have a significant impact on the market. The high value council tax surcharge is not being introduced until April 2028 and will apply to less than 1% of properties in England and around 3% in London.
“The increase in taxes on income from properties may dampen buy-to-let activity further and hold down the supply of new rental properties coming onto the market, which could, in turn, maintain some upward pressure on private rental growth.”
How estate agents reacted to the Nationwide House Price Index
Commenting on the index, Iain Mckenzie, chief executive of The Guild of Property Professionals, said: “The latest Nationwide HPI figures show the market ending 2025 on a softer note.
“But this should be seen more as a gentle cooling than any loss of underlying resilience. Price growth remained remarkably steady throughout the year despite pre-Budget uncertainty and a notable increase in the number of homes for sale.
“What’s particularly encouraging is that activity has held up well. With around 1.2m homes sold in 2025, the highest level since 2022. It’s clear that steady mortgage rates and rising wages have continued to support demand, even as buyers became more price-conscious towards the end of the year.”
McKenzie said the Bank of England’s decision in December to cut the Bank Rate from 4% to 3.75% is a timely boost for confidence, adding: “While inflation remains above target, the latest figure coming in lower than expected will help reinforce sentiment. Lower borrowing costs, combined with a Budget that proved less severe than many feared, should underpin activity as we head into the spring 2026 selling season.
“Overall, while headline price growth has slowed, the fundamentals remain positive. We expect market momentum to strengthen in the New Year as improved affordability and greater certainty encourage more buyers and sellers to make their move.”
Nathan Emerson, chief executive of Propertymark, added: “Aspiring and current homeowners will no doubt have felt reassured heading into the end of the year, with falling inflation and base rates improving affordability and helping more buyers consider their next move during 2026.
“Given the number of policy and economic changes the housing market experienced throughout 2025, including legislative updates, mortgage rate fluctuations, and the Autumn Budget, a period of price stability is an encouraging outcome.
“Stable house prices provide a solid foundation for the year ahead, allowing buyers and sellers to make more informed decisions without the pressure of rapid price movements. As the market continues to adjust, this stability should support activity and confidence throughout 2026.”
Source: Estate Agent Today
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