UK home costs rise by 2.4% yearly sometimes however fall by 1% in London

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Your help makes all of the distinction. Learn extra The common UK home value elevated by 2.4% yearly in December final yr, slowing from 2.8% progress within the yr to November, the Workplace for Nationwide Statistics (ONS) stated.

The standard property worth in December 2025 was £270,000.

Common home costs elevated to £292,000 in December (1.7% annual progress) in England, £215,000 (5.0%) in Wales, and £191,000 (4.9%) in Scotland.

Inside England, the North East had the very best home value inflation, at 4.6%, within the 12 months to December. Worth progress there slowed in contrast with a 7.5% enhance within the 12 months to November.

Annual home value inflation was weakest in London. Common property values in London fell by 1.0% yearly in December. This was a sharper fall in contrast with a 0.7% value lower within the 12 months to November.

The common home value for Northern Eire was £196,000 within the fourth quarter of 2025, marking a 7.5% annual enhance.

Nathan Emerson, chief govt of property professionals’ physique Propertymark, stated: “A slowing within the annual progress of home costs alerts ongoing affordability pressures and cautious purchaser sentiment. Whereas modest value changes could enhance entry for some purchasers, decreased exercise can dampen general market confidence.

“Guaranteeing a supportive lending atmosphere and rising housing provide will likely be essential to sustaining stability and inspiring sustainable ranges of market exercise.”

ONS figures launched on Wednesday additionally confirmed that the speed of Client Costs Index (CPI) inflation was 3% in January, slowing from 3.4% in December.

Hina Bhudia, associate, Knight Frank Finance, stated: “The mixture of softer inflation information this morning and weak jobs figures yesterday raises the chance of two price cuts this yr.

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“Main fastened charges have remained regular prior to now 4 weeks and there was appreciable jostling for place in the course of the market. We expect this week’s figures will pave the way in which for fastened charges to ease additional within the coming month main as much as the subsequent rate of interest resolution on March 19.

“Any falls will likely be incremental, however they'll have a significant impression on sentiment. Provide is excessive and patrons have loads of alternative. That, mixed with easing mortgage charges, may tee up a busy spring within the housing market.”

Jason Tebb, president of OnTheMarket, stated of the 1.0% annual value fall in London: “Elevated provide, low purchaser demand and stretched affordability within the capital – the place values are usually considerably greater than elsewhere – are combining to maintain a lid on costs.

“With inflation slowing to three% within the yr to January and shifting nearer to the Financial institution of England’s 2% goal, this could allow additional base price reductions.”

He stated Financial institution of England base price cuts “have improved affordability and had an enormous constructive impression available on the market, with any additional cuts more likely to result in renewed exercise this yr”.

Nicky Stevenson, managing director at Fantastic & Nation, stated: “The basics stay supportive, and whereas wage progress could also be easing, there's bettering certainty round borrowing prices.

“These circumstances have helped preserve patrons engaged, whereas sellers are more and more adapting to a market that rewards lifelike pricing and robust presentation.

“Within the present atmosphere, good properties in the appropriate areas can nonetheless entice wholesome competitors, however over-ambitious asking costs are much more more likely to be challenged.”

Iain McKenzie, chief execitove of The Guild of Property Professionals, stated: “Encouragingly, the broader financial backdrop has turn into extra supportive. Inflation easing to round 3% and intensifying competitors amongst lenders are already pushing mortgage charges down, bettering affordability, significantly for patrons with bigger deposits.

“With round 1.8 million households attributable to remortgage in 2026, a downward price trajectory will likely be welcome reduction and will assist maintain market confidence.”

The report additionally stated that common UK month-to-month personal rents elevated by an estimated 3.5%, to £1,367, within the 12 months to January 2026. The common month-to-month hire was £46 greater than a yr earlier.

ONS head of housing market indices Ian Boreham stated: “The rental market continues to chill, with UK rents inflation slowing to its lowest annual price since March 2022.”

The common month-to-month hire in England was £1,423 in January 2026, up 3.5% (£48) year-on-year. This was the bottom annual progress price since March 2022.

In Wales, the typical month-to-month hire was £826 in January, up 5.8% (£45) from a yr earlier. The annual rise was greater than a 5.7% annual enhance recorded in December 2025.

Common month-to-month hire for Scotland was £1,021 in January 2026, up 2.6% (£25) from a yr earlier. The ONS stated this was the bottom annual rise it had recorded for greater than 4 years. However its report urged warning needs to be used when evaluating the figures with different international locations attributable to information assortment limitations for Scotland.

The standard month-to-month hire in Northern Eire was £875 in November 2025, the newest month for which this determine is accessible. This marks a 5.6% of £46 enhance in contrast with a yr earlier.