House Prices going into 2025

[Twiglets1]

We often refer to House Price Indexes (HPIs) in discussions re house prices but there are several out there so which to use?

If you want to know average asking prices use the Rightmove HPI and the price will be for the entire-market in England & Wales.

If you want to know average selling prices it's either the Halifax or Nationwide HPIs but they only have data on buyers who have mortgages approved with them in the UK, so cash buyers for example will be excluded.

The Office for National Statistics HPI is arguably the most accurate as it publishes sold prices on all transactions in the UK (mortgages & cash). However, there is a delay so the data is at least a couple of months behind.

Anacdata HPI also covers mortgage & cash transactions and is the first to report regional monthly selling prices, but only covers England & Wales.

Anacdata house price index (England & Wales) February 25

Positivity in the market
• Uplift helped by household moves ahead of Stamp Duty changes
• But some evidence there is underlying momentum which further rate cuts might help sustain
• Market recovery broadly-based but London and South East still lagging

The housing market in February
The average sale price of a home in England and Wales increased by nearly £2,500 or 0.7% to £357,300 in February – the second positive month in a row.
Having drifted lower over much of the past two years, the pick-up in recent months reflects improving household finances and easing mortgage rates, as well as a short-term boost as households keen to move home in England and Northern Ireland try to do so before April when a favourable stamp duty regime comes to an end.

Despite stronger prices in January and February, average annual prices are still £9,000 or 2.5% lower than a year ago (see Figure 1) and more than double that below the previous peak reached in late 2022, according to Acadata figures.

Standing back a little we can see that transactions were up in January, at the end of the sales process and mortgage approvals were up in February, at the start of that process. This suggests there is a continued pipeline of activity feeding though and that with the market pricing in further rate cuts this year it is quite possible the build-up in momentum will continue despite the negative stamp duty changes noted above.

Indeed agents have been noting the buyers entering the market now with no prospect of completion before April seem undeterred even though it must impact on some. We know there is significant pentup demand and with prices starting to rise some may have taken the view that it is better to push on

https://www.acadata.co.uk//assets/uploads/2025/03/e.surv-Acadata-England-Wales-HPI-February-2025.pdf

Halifax House Price Index: April 2025

• House prices increased by +0.3% in April vs -0.5% in March
• Average property price now £297,781 compared to £296,899 in previous month • Annual rate of growth at +3.2% up from +2.9% in March
• House prices remarkably stable over last six months, down by just £48
• Northern Ireland, Wales and Scotland see strongest annual price growth

Regional variations:

Northern Ireland continues to post the highest level of annual property price inflation, rising by +8.1% in March. House prices now average £208,220.

Wales has the next fastest pace of annual house price growth, increasing to +4.7% last month. The average house price now stands at £229,079.

Next comes Scotland, where property prices were up +4.6% year-on-year in April, to an average of £214,011.

In England, the North West shows the strongest growth, up +4.1% on an annual basis, with properties now costing an average of £240,975.

London continues to see more subdued annual house price growth of +1.3%. However the capital remains the most expensive market for properties in the UK, with an average price tag of £543,346.

The South West has the slowest rate of annual property price inflation, at +0.9%. The average house price is £304,451

https://www.halifax.co.uk/assets/pdf/april-2025-halifax-house-price-index.pdf

Acadata House Price Index April (England & Wales)

A flat market but with strong regional variations

• Tax changes may be less disruptive than expected
• The North moves ahead while the South continues to drag the market backwards
• Market to continue mildly positive despite global uncertainties

Rob Owens, Head of Research, comments: “The average sale price of a home in England and Wales remained unchanged in April at £359,200, continuing a generally lacklustre performance over recent months. Nominal prices have broadly moved sideways while declining in real terms. Despite improving household finances and easing mortgage rates, the housing market has not seen significant growth. London and the South are the primary drivers of this plateau. London experienced a notable monthly decrease of 1.7%, with average prices falling to £642,386. The South East and South West also saw declines of 0.4%, with average prices at £441,962 and £355,577, respectively. In contrast, northern regions have shown more robust growth. The North East saw a monthly increase of 1.6%, with average prices reaching £211,226, while the North West experienced a 0.9% rise to £262,836.
Annual price comparisons have improved modestly from a buyer’s perspective, with average prices currently 1.4% lower than a year ago. This is despite a significant short-term boost in demand from households moving before the end of stamp duty concessions on April 1st. Overall, the housing market reflects a two-tier dynamic, with northern regions reaching fresh market highs while southern regions, particularly London, continue to face affordability constraints.”

https://www.acadata.co.uk//assets/uploads/2025/05/e.surv-Acadata-House-Price-Index-England-and-Wales-April-2025.pdf

This matches what I have been seeing in my bit of London for months.

I think London will continue to struggle somewhat - the cost of borrowing makes a huge difference to affordability. Millions are still to come off lower deals.

Agree it is not surprising that affordability is keeping prices subdued in many parts of London. Both for FTBs & people trying to buy bigger properties.

And people coming off lower fixed term deals are of course noticing the difference in monthly mortgage bills. At least these are currently moving in a downwards direction again but they won’t be returning to the ultra low rates for the foreseeable future.

Do you mind saying which part of London (I.e. NE NW). I’m SE Zone 2 and it is a mad market here for houses but not flats.

I have been following the flat market in zones 1 and 2 in Central London for some time - looking to move back in to retire in the next few years from Home Counties and my young adult DCs might buy as their careers and social lives are based centrally. I have been shocked by the stagnation (probs real term loss) of flat values since 2016 but also the rocketing of house prices in the same post codes (not looked at East London which assume has had a more positive trend).

We will buy a flat for ourselves (£1.5ish) not too bothered about capital gain as it will be our last home and moving for the lifestyle. Not sure about my DCs buying a flat for £600k as they might be better skipping this step and going for a suburban house. Any thoughts?

We bought a flat - zone 2. We did a lot of work to it so made some money but not huge amounts as that market is pretty slow. However I do not regret living in a flat closer to the city and would much prefer a flat to living further out to bet a house. I have absolutely no desire to move further out now either. In fact if we move further out it would be completely away.

We had a period flat, share of freehold, and I don’t regret anything about it. We had to move as our DD is getting older and needs more room.

@kirinm SW - flats have been crap here for some time now tbh. Houses priced at lower ends are going but houses a bit more are sitting there even though you get a lot more house for the money. And when you look at inflation I don't think any have kept up price wise.

@Tikityboo I remember saying on here a few yrs ago that I saw lots of flats selling for their 2016 price & people told me I was taking nonsense or it was a very specific area. It wasn't.

Quite a few of my younger colleagues & family have bought a house as a FTB. They have skipped the 500/600k inner London flat & gone for the 600/700k house in outer London. It makes sense when you look at stamp duty and the fact many have dc or what them asap. I think it's reflected in primary school numbers too & why so many are struggling to fill spaces.

I think we’ve got SW people moving in because of how expensive places like Clapham are now - compared to the size of houses you can get here. I was talking to somebody at work yesterday complaining that some of the houses near me are going for close to £2.0m now and she lives in North and thought they were pretty reasonable!

https://uk.news.yahoo.com/over-10-000-london-children-160016993.html?guccounter=1&gucereferrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guceereferrersig=AQAAAHfzPz9m8VDpyKz9zXVuEdNyc6fMrQND5wdIHMC399A86MOM-dYlx1O511zfO0tLHWa-OJEaafYd4io9C-Agx9AhYjsGTjKXHN9xu7fEByEWHxQcmBETTxrKQBOdt7NXs2qDOEPqna1bGs_obRmUczYsEZQ57ZC-iKTBarrS3oe2

Even in London I don't think the majority are buying 2m houses & 2m will still get you a decent house in Clapham & similar SW areas

Definitely not the majority and I’ve no idea how people can afford it but houses by me are selling off market for over asking. I’ve been looking for a house for months (not in that price bracket) but know people who are and how they’re getting into bidding wars. Crazy.

We are buying something of a wreck - same area and similar square footage - but the condition of it has obviously made it an unattractive purchase for most people. I think houses ‘done up’ sell quickly and people are more alive to the cost of renovations than they were.

This was my thinking for my DCs - but have to juggle that the extortionate rent they are paying which I imagine will be for the next 5 years at least as they want to be city based. @kirinm - that has always been my approach in or out. Lived centrally for years then wanted to have a big family and raise them in a semi-rural environment which we managed to do (still only 18 mins on train to central London). Maybe I should buy a house in central London and charge them all rent!!

renovations are extortionate now. We planned to do an extension but won't be.

We are going to invite my now grown up son to move into our new house (if the purchase actually goes through). We will charge him rent as I do think it’s important to ensure he manages money, but one that he can afford and won’t continue to cripple him. In return he gets a nice place to live and an opportunity to save money.

I think you just need to be quite savvy with location. I had friends growing up in parts of z3 who were a good 20/25m walk from the closest station or decent shops. My sibling has bought in z4, 8 mins from the station & 3 minutes from the high street. Interestingly where my sibling has bought prices have increased since they started looking.

@kirinm my parents did similar, let us live at home post uni and charged cheap rent. I want to do the same for my dc (only primary age) but realistically will probably move to z4 way to have something big enough for dc post uni.

@Tikityboo my daughter bought a 1 bed flat in North London when she was 30 (with a lot of family help so a big deposit) for about 450k.

I did try suggesting to her that for the same money she could get a very nice 2/3 bed terraced house near us in Berkshire that she wouldn’t grow out of.

She was absolutely determined to buy in London though (mainly for her social life) & doesn’t regret it 3 years on. Your children might be better financially to miss the “flat in London” stage & going straight to the suburban house but convincing them of that could be another matter if they’re anything like my daughter!

You don't have to leave London to buy a house though, sometimes it's just a case of going to the place next to that latest hotspot.

Hard to buy a house in London for 450k though in a desirable area with good transport links.

Hard to buy a house in London for 450k though in a desirable area with good transport links.

I would say it's hard to do the above outside of London as well plus commuting is often £££.

I don't know about that. I think there are lots of areas you could achieve that outside of London. Where we live in Berkshire has fast trains into London for example (25 minutes). Commuting costs aren't that high if people only need to go into the office one or two days a week - even for people with train season tickets it's cheaper than buying in London.

But many people just prefer to live in London, especially younger people with busy social lives.