House Price Index - What’s Really Happening With Prices in 2025?
The latest House Price Index shows that while the housing market is seeing more homes coming up for sale, prices overall are still holding steady - with average UK property values now sitting at £267,500.
If you're a buyer right now, the picture might feel a bit mixed. There’s more choice than before, mortgage rates have settled, and prices are rising in some areas while cooling in others. Here's a quick breakdown of what the numbers mean - and how to stay one step ahead in today’s market.
Price growth is slowing - but homes are still selling
The average UK house price rose by 1.8% in the year to February 2025. That’s a slightly slower rate than the previous month, but it’s still an increase compared to this time last year, when prices had dipped.
More importantly, sales agreed are up by 5% year on year, showing that buyers are still confident and deals are being done. In fact, buyer demand is 10% higher than it was a year ago.
What’s holding price growth back is the fact that more homes are coming onto the market - 11% more than this time last year. That’s great news for buyers, because it means more choice and less pressure to rush decisions.
Mortgage rates have levelled out
Mortgage rates have stabilised over recent months and are now sitting at an average of around 4.4%. While we’re no longer expecting big drops this year, affordability has been supported by wage growth - with average earnings up 6% over the last 12 months.
The market may be adjusting to the “new normal” of slightly higher borrowing costs, but many buyers are now more prepared for this and adjusting budgets accordingly.
Regional differences are starting to widen
In some areas - especially the North West, Yorkshire, Scotland and the Midlands - prices are rising faster. Demand is outpacing supply in these regions, which is supporting local price growth.
In contrast, areas in southern England, including parts of London, are seeing more modest increases or even slight falls. That’s because more homes are being listed than sold, creating more competition between sellers and encouraging realistic pricing.
Some areas in the South West and South East have seen price drops of up to 0.8%, especially in locations where second homes make up a large part of the market. These price adjustments are creating buying opportunities for those who are ready to move.
What’s happening with first-time buyers?
In London, buyer demand is currently around 3% lower than this time last year. One reason is the impact of changes to stamp duty from 1 April 2025, which means more first-time buyers in the capital will now need to pay tax on their purchase.
Many buyers acted early to beat the deadline, so activity has cooled slightly in the short term. However, outside London, most first-time buyers will still pay no stamp duty on homes under £300,000 - and demand is noticeably higher in areas like the Midlands and South East.
What does this all mean if you're thinking of moving?
There’s a strong message in the data - buyers have more choice right now, and with the right preparation, it’s a good time to be active in the market.
Supply is up, giving you a better chance to find the right home
Prices are stable, but more realistic asking prices are becoming common
Sellers are often open to negotiation, especially where competition is higher
Mortgage rates are steady, helping you plan your budget with more confidence
If you’re planning to sell in 2025, the key is setting the right price. With so much choice available to buyers, it’s more important than ever to get your valuation right from the start.
Want to know how this affects your move?
Every area is different - and every buyer's situation is unique. If you're wondering what this market means for your own plans, just get in touch with & Co. We’ll help you understand what's happening in your local area, what kind of property your budget can stretch to, and how to make your next move confidently.
No pressure - just local advice that puts you first.
