UK house prices picked up pace towards the end of last year with annual growth accelerating despite continued weakness in London, according to the latest figures from the Office for National Statistics.
The average UK house price rose by 2.5% in the year to November 2025, reaching £271,000. This marked a clear acceleration from the 1.9% annual increase recorded in October and points to a gradual firming in market conditions after a prolonged period of subdued activity.
In England, the average home was valued at £293,000, up 2.2% or £6,000 on the year, a stronger rise than the 1.5% recorded a month earlier.
Scotland saw a sharper increase, with average prices climbing 4.5% to £193,000, while Wales lagged behind with annual growth of just 0.7%, taking the average price to £209,000. Northern Ireland continued to record the strongest growth, although the data is less current. In the third quarter of 2025, average prices rose by 7.1% year on year to £193,000.
PRICE GROWTH
Within England, the North East recorded the fastest rate of house price inflation, with prices rising by 6.8% in the year to November, up from 5.2% the previous month.
London remained the weakest region, with prices falling by 1.2% over the year, although this was an improvement on the 2.6% annual decline recorded in October.
RENTS SLOWING
Alongside firmer house prices, rent inflation continued to ease, offering some relief to tenants after several years of steep increases.
Average UK monthly private rents rose by 4.0% in the year to December 2025, taking the typical rent to £1,368 a month. This was down from 4.4% annual growth in November and marked the slowest rate of rent inflation since May 2022.
Lowest annual increase since May 2022.
In England, average rents rose by 3.9% to £1,424 a month, also the lowest annual increase since May 2022.
Wales and Northern Ireland continued to see stronger growth, with rents rising by 5.7% in both nations, while Scotland recorded a more modest 2.8% increase to £1,018, its lowest annual rise for more than four years.
The North East recorded the highest rent inflation of any English region at 7.9%, although this too has eased from recent peaks.
London once again stood out at the other end of the scale, with rents rising by just 2.1% over the year. Despite the slower growth, the capital remains by far the most expensive place to rent, with average monthly rents of £2,268, compared with £762 in the North East.
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “Despite considerable political and economic uncertainty, it is positive to see the housing market deliver sustained momentum over the last 12 months.
“Looking at industry data, there were around 82,000 additional housing transactions last year compared to the year previous, which directly underlines growing consumer confidence and affordability in many regions.
“As we further embark into 2026, there are encouraging signs that the housing market will continue to deliver growth.
“However, with inflation seeing a slight increase, there could be potential hesitation from the Bank of England regarding further dips in base rate in the short term or until conditions prove supportive.”
CONSUMER CONCERN
And he adds: “Any increase in potential average rental costs rightly brings concerns for consumers, especially those who are squeezed by cost-of-living pressures.
“Although we have witnessed rental inflation trend further downwards, the rental market continues to suffer from a chronic undersupply of properties versus actual demand.
“We currently sit in a situation where many letting agents continue to highlight concerns regarding the impact of updated legislation and the real-world effect such changes are having on many landlords’ ability to operate.
“This, coupled with additional and often more complex tax frameworks, has brought profound change within the sector and applied additional pressure on already overstretched stock levels.”
NOT FIRING ON ALL CYLINDERS
Tom Bill, head of UK residential research at Knight, says: “House price growth bumped around close to zero at the end of last year as demand faltered ahead of November’s Budget.
“The prevailing mood now is relief as the tax speculation fades, which has supported activity in the early weeks of 2026.
“However, the market is far from firing on all cylinders. Confidence is the key missing ingredient and the market feels like it needs a demand-side shot in the arm as the economy struggles to grow and Westminster politics remains volatile. We expect low single-digit UK house price growth this year, primarily based on lower mortgage rates.
“UK rental inflation has eased, but we continue to see upwards pressure on rents in London and the south-east as more landlords sell up due to regulatory and tax changes.
“The Renters’ Rights Act will be a key test.”
“The Renters’ Rights Act will be a key test for the lettings market when it comes into effect this year.
“Some prospective landlords are holding off to see if the court system copes with the changes around no-fault evictions and whether the new rules raise the risk of void periods.”
MOTIVATED BUYERS
Amy Reynolds, Head of Sales at Richmond estate agency Antony Roberts, says: “There is a lot of pent-up demand that’s now being released, particularly from buyers who paused around the Budget and are now coming back to the market with renewed confidence.
“These buyers are motivated, organised and prepared to make strong offers rather than wait any longer.
“In practical terms, we’re seeing this play out very clearly. A small house we’ve had on the market since September, which previously attracted no interest, has received three offers this week alone – one at asking price– with the buyer indicating they’re prepared to increase.
“We also have additional viewings booked. Similarly, a flat that had seen very little activity since September has suddenly had multiple viewings and second viewings arranged.
“For buyers, this means the market is becoming more competitive again, and hesitation can cost you. Those who are decisive and prepared are currently best placed to secure the right property.”
BUYING POWER WILL IMPROVE
Nick Leeming, Chairman of national estate agency Jackson-Stops, says: “November’s modest house price growth points to a market in a holding pattern towards the end of 2025, rather than one gaining momentum.
“Buyers, sellers and the wider industry held their breath amid weeks of speculation ahead of the Autumn Budget, yet underlying market fundamentals kept house prices propped up.
“Once the Chancellor set out her fiscal plans, much-needed clarity helped to steady confidence after a prolonged period of uncertainty.
“Reassurance is now beginning to filter through to buyer behaviour.”
“While it was not a catalyst for immediate change, certainty matters, and that reassurance is now beginning to filter through to buyer behaviour, setting the market up for a stronger-than-usual start to the new year.
“Looking ahead, while upcoming council tax changes are likely to prompt some households to reassess affordability and running costs, particularly at the upper end of the market, they are unlikely to derail activity. Instead, continued recalibration is expected as buyers and sellers adjust expectations.
“With the Bank of England expected to make further base rate cuts over the coming year, buying power should gradually improve, further supporting market activity into 2026.”
CONFIDENCE IS RETURNING
Iain McKenzie, CEO of The Guild of Property Professionals, says: “Today’s ONS figures underline the growing resilience of the UK housing market.
“A 2.5% rise in average prices to £271,000 shows that, despite uncertainty in the run-up to the Autumn Budget, serious, needs-based buyers continued to move forward.
“The uplift in annual growth from October reflects a market that is quietly strengthening rather than overheating.
“Regional performance also highlights where momentum is building, with Scotland leading the way at 4.5% growth, while England and Wales continue to post steady, sustainable gains.
“This points to confidence returning at different speeds across the UK, but importantly, confidence is returning nonetheless.
“Looking ahead, the market has begun 2026 on far firmer ground. Interest rates are one of the biggest positives.
“The decision to cut rates to 3.75% is materially improving affordability.”
“The Bank of England’s decision to cut the Bank Rate to 3.75%, combined with mortgage rates now at their lowest levels since before 2025, is materially improving affordability.
“With two- and five-year fixed rates now well below where they were this time last year, buyers are feeling more able to act.
“Alongside more stable borrowing costs, rising incomes and the widest choice of homes in a decade, conditions for buyers have improved.
“Demand to move remains strong, particularly from those who delayed plans over the past two years due to uncertainty. As confidence rebuilds and transactions pick up, we expect a stronger-than-usual start to 2026 and a brighter outlook for price growth as the year progresses.”
DEMAND IS 10% LOWER THAN LAST YEAR
Richard Donnell, Executive Director at Zoopla, says: “Rental inflation is slowing as the supply-demand gap narrows sharply.
“Improved affordability for first time buyers and a large drop in international migration means weaker rental demand, while there are 14% more homes for rent than a year ago, which is boosting choice for renters.
“Rental inflation is returning to normal and rents are on track to rise by just 2.5% in 2026, the lowest for four years.
“Budget uncertainty hit demand for housing in the sales market, while more homes for sale is boosting choice and supporting a buyers’ market which is keeping price growth in check.
“There has been a strong rebound in demand over the first weeks of 2026, but demand is 10% below last year and in linen with 2024. There is demand for housing, but sellers need to price realistically to achieve a sale in 2026.”
AFFORDABILITY REMAINS CHALLENGING
Jason Tebb, President of OnTheMarket, says: “Property values continued to rise on an annual basis in November, with the average price £6,000 higher than a year ago.
“In the run up to the delayed Autumn Budget, caution and price sensitivity prevailed as some would-be movers paused amid concern about potential property tax changes.
“However, since the Budget, our own property sentiment report reveals that over half of sellers and renters across the country are pressing ahead and even accelerating their plans, a positive sign for market activity this year.
“The average UK house price conceals notable regional differences, with values in London contracting on a yearly basis.
“Increased supply, low buyer demand and stretched affordability in the capital where values can be significantly higher than elsewhere in the country are all playing their part, along with higher living costs.
“With inflation rising to 3.4% in the year to December, there will be concerns that this will slow the pace of future Bank of England base rate reductions.
“Six base-rate cuts in the past 18 months have had a huge impact on the market, boosting buyer and seller confidence and activity, although affordability remains a challenge.”
ACTIVITY HOLDING UP
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “The most comprehensive of all the property reports, this one from the ONS – though a little dated – confirms what we’re seeing on the ground.
“Talk of a possible market correction was premature. Activity is holding up better than expected, supported by falling mortgage rates with the overwhelming majority of transactions completing despite some hard bargaining.
“Worries about what was likely to be included in the Budget inevitably prompted many to press the pause rather than the stop button. The relief is now palpable.
“Looking forward, the amount of property for sale – particularly flats – and likely slower pace of base-rate reductions, particularly given the latest inflation news, as well as some employment nervousness, means no significant price rises are likely for the time being at least.”
MEANINGFUL PROGRESS
Verona Frankish, CEO of Yopa, says: “On the face of it, November’s figures are encouraging, with the rate of house price growth up both monthly and year on year.
“Yes, this rate of growth may be more subdued than usual, but it’s important to note that these figures reflect the market just prior to the Autumn Budget.
“With this uncertainty having lifted almost immediately, we’ve seen the market make meaningful progress in the few short months since and this suggests that a far stronger house price performance is on the cards in 2026.”
SELLERS GETTING REALISTIC
Damien Jefferies, Founder of Jefferies London, says: “While the national picture shows modest growth, London continues to move at a very different pace, with prices still slipping on an annual basis despite a monthly uplift.
“This reflects a market that is recalibrating, as buyers remain disciplined and unwilling to stretch while economic and fiscal clarity remains limited.
“That said, this more measured environment is helping to reset expectations on both sides. Sellers are becoming more realistic on pricing, while buyers are increasingly alert to value, particularly across fringe-prime locations where long-term fundamentals remain strong.”
POSITIVE TERRITORY
Marc von Grundherr, Director of Benham and Reeves, says: “The latest figures show that the UK property market has continued to move forward, with both monthly and annual growth remaining in positive territory despite a backdrop of political and economic uncertainty and this resilience was a defining feature of the market throughout 2025.
“London may be trailing other regions in percentage terms, but even modest movements in the capital translate into far more meaningful sums in real terms.
“While major fiscal events like the Autumn Budget inevitably cause hesitation, history shows the market repeatedly absorbs these shocks, and there is every chance the removal of this uncertainty will now help support activity in 2026.”
