UK house prices rise by 2.4% annually typically but fall by 1% in London

Aneisha Beveridge, research director at Hamptons and Connells Group, said: “House prices across the country ended 2025 around 2.2 per cent higher than a year earlier.

“Growth was strongest in the early months as buyers rushed to complete purchases ahead of the stamp duty holiday deadline, but momentum eased as the year wore on.

“Even so, with the economy broadly stable and mortgage rates drifting down through the year, demand held up well enough to keep prices in positive territory, albeit slightly behind inflation.

“Over the past three years, prices have risen only 2.3 per cent across Great Britain, well below the 10.1 per cent increase in broader inflation.

“The national figure, however, masks a wide regional divide.

“London saw prices slip one per cent year on year in December, driven by a sharper fall in Inner London, while much of the South recorded little or no growth.

“The South East, in particular, now sits on the cusp of turning negative, meanwhile prices in Inner London have been falling for the last three years.

“By contrast, Wales, Scotland and the North posted the strongest gains, with annual growth topping four per cent.

“Affordability remains a bigger constraint in higher priced southern markets, a trend compounded by Budget related uncertainty late last year.

“Buyers have instead gravitated towards more affordable parts of the country, supporting demand in regions where prices remain lower.

“High stamp duty and the introduction of the mansion tax have also discouraged moves at the top end, reducing turnover.

“And while mortgage rates have fallen from their peak, they remain elevated compared with pre-2022 levels, keeping the cost of borrowing – and therefore moving – relatively high.”