UK house prices remained largely stable in February, recording a marginal decline of 0.1%, following a 0.6% rise in January, according to the latest data from Halifax release on Friday.
The average property price now stands at £298,602, slipping slightly from £298,815 in the previous month. Annual house price growth held firm at 2.9%, unchanged from January.
Scotland emerged as the strongest performer, experiencing the fastest house price growth in 13 months, with prices rising by 3.8%, a reflection of robust demand in the region.
Amanda Bryden, head of mortgages at Halifax, noted that February’s figures reflect the fine balance within the UK housing market.
DEMAND HAS WANED
While there had been speculation about a surge in new mortgage applications ahead of the upcoming stamp duty changes, some of that demand appears to have waned as the April deadline approaches, given the time needed to complete purchases.
This shift was evident in the differing pace of price growth among buyer types. First-time buyer property prices grew at a slower rate of 2.4% in February, while home mover price inflation accelerated to 3.7%.
Despite the slight monthly dip in prices, market activity remains resilient, comparable to pre-pandemic levels.
And while affordability challenges persist, the ongoing shortage of housing supply coupled with steady demand suggests that property prices are likely to rise throughout the year, albeit at a more measured pace than in 2023.
INDUSTRY REACTION
Nathan Emerson, Chief Executive of Propertymark, says: “An increase in house prices is an encouraging trend that has been reflected in other recent reports.
“The latest Bank of England Money and Credit Report also found that mortgage lending rose to 1.8% in January 2025 from 1.5% in December. This should help enhance confidence as people purchase their next home.
“Propertymark looks forward to working with the UK Government on their new Planning and Infrastructure Bill and with all the devolved administrations regarding their own housing targets, which will all be central in ensuring demand and supply levels are balanced out to make housing more affordable in the long-term for the majority of aspiring homeowners.”
ROBUST MARKET
Gareth Samples, Chief Executive of The Property Franchise Group, says: “The market remains robust, with house prices supported by the year-on-year increase in activity seen at the start of 2025.
“Factors such as lower interest rates and wage growth have also contributed to a stronger foundation for sustained growth throughout the year.
“The momentum built up towards the end of 2024 has carried over into early 2025. This is partly due to first-time buyers rushing to meet the stamp duty deadline, as well as needs-based buyers who had been waiting for more favourable interest rates.
“While demand has risen, the supply of homes on the market has also increased, providing buyers with more choice and greater negotiating power. The larger number of properties available, coupled with the impending Stamp Duty deadline, is expected to keep price inflation in check.
“Although the higher-than-expected jump in CPI inflation has created a few bumps in the downward trajectory of the base rate, February’s cut to 4.5% has been a welcome relief for many. Since then, competition in the mortgage market has intensified, with the lowest fixed-rate mortgages dipping below 4% for the first time in months.”
STEADY GROWTH
Daniel Austin, CEO and co-founder at ASK Partners, said: “Despite a rise in house prices, we believe that growth is likely to face pressure and remain steady, as higher borrowing costs start to affect buyers, despite the market’s continued resilience.
“Investors and developers in the residential sector remain motivated by the supply demand imbalance and under the new government, we think there will be more projects that get off the ground.
“We are seeing a greater variety of housing options, such as co-living schemes, coming to market which fulfil the growing requirements of younger professional buyers. If prices flatten and interest rates start to fall, we will see more first-time buyers able to step onto the property ladder.”
FIRST-TIME BUYER RUSH
Iain McKenzie, CEO of The Guild of Property Professionals, says: “It’s encouraging to see the housing market’s continued resilience as we move into 2025, with both transaction levels and sales agreed figures showing year-on-year growth at the start of the year.
“The market remains active, driven by first-time buyers rushing to complete deals ahead of stamp duty changes and needs-based buyers who postponed decisions during 2024’s volatility.
“Strong earnings growth is also supporting activity. However, a greater supply of homes for sale and the impending stamp duty deadline are expected to keep price inflation in check.
“Both demand and supply have increased across all property types, though market dynamics vary. Detached houses are in growing demand, with an 18% year-on-year rise in the demand-to-supply ratio, while demand for flats has slightly declined since January 2024.”
SINGLE-DIGIT GROWTH
Tom Bill, head of UK residential research at Knight Frank, says: “Despite a rush to complete ahead of the stamp duty increase in April, supply outpaced demand in the first two months of this year, which kept downwards pressure on house prices.
“That pressure will be sustained if more inflation creeps into the UK economy through measures such as raising employer national insurance contributions.
“We were also reminded [last] week of how global politics can act as a brake on the market when Germany announced a defence spending increase, which pushed up borrowing costs in Europe. We expect low single-digit house price growth this year but the outlook is changeable.”
ECONOMIC CONCERNS
Jason Tebb, President of OnTheMarket, says: “The housing market continues to shake off external economic concerns demonstrating remarkable resilience, with encouraging levels of activity and interest.
“The steadiness of house prices suggests that affordability is keeping a lid on values with buyers unable and unwilling to pay inflated amounts.
“Sellers keen to take advantage of what is traditionally a busier time of year for the housing market as the sun shines, should bear this in mind.
“Higher interest rates have dampened activity so last month’s rate cut from the Bank of England will be helpful in giving the market a boost. As we approach the end of the stamp duty concession this month, further cuts could give the market some much-needed impetus later in the year.”
GROWING CONFIDENCE
Matt Thompson, head of sales at Chestertons, says: “In February, the property market saw a higher volume of enquiries from parents who are looking for a property in catchment areas of highly-rated state schools.
“This resulted in larger family homes attracting interest from multiple buyers.
“With the introduction of sub-4% mortgages, we also witnessed growing buyer confidence amongst second-steppers and, despite to the looming changes to Stamp Duty, still registered a number of first-time buyers who are eager to get on the property ladder.”
STRONG APPETITE TO BUY
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “A strong appetite to buy for some is almost matched by others wanting to ensure the increasing availability of stock has been properly appraised and best terms negotiated before proceeding.
“Prices, especially for houses, are holding up well, supported by income growth exceeding inflation but will come under pressure, particularly now it is probably too late to take advantage of the stamp duty concession.
“Employer concerns about increasing national insurance and minimum wage commitments are not helping confidence either.”
CONFIDENCE BOOST
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “On the ground, we have noticed the recent drop in mortgage rates has boosted buyer confidence but affordability continues to be the dominant factor.
“As the sun continues to shine, more stock is coming to market as family homes with gardens in particular start to look their best. Well-priced and well-presented homes are selling relatively quickly; while buyers may be pausing to assess financial implications before taking the plunge, high-demand areas are retaining interest.”
ONWARDS AND UPWARDS
Marc von Grundherr, Director of Benham and Reeves, says: “Despite mortgage rates remaining higher than today’s buyers have become accustomed to, the property market has remained resilient in the face of uncertainty.
“With the winter months now behind us, it’s onwards and upwards from here as we approach the spring selling season and the busiest time of year for market activity and as more buyers look to make their move in 2025, house prices will remain stable and continue along their upward trajectory.”
FURTHER GROWTH
Verona Frankish, Chief Executive of Yopa, says: “The UK property market has continued to stand strong with house prices remaining higher than this time last year, driven in part by the rush to beat the stamp duty deadline at the end of this month.
“Whilst the average home buyer is set to see stamp duty costs increase by £2,500 as of April, this is unlikely to deter them from their quest to climb the property ladder and so we expect to see further growth materialise as the year progresses.
