UK house prices picked up pace towards the end of last year with annual growth accelerating despite continued weakness in London, latest figures from the Office for National Statistics reveal.
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.
PRICE GROWTH
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.
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.
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
Adrian Moloney, group lending distribution director, OSB Group, said: “Today’s data from ONS shows that as expected, house price growth remains steady but slow.
“Yet the reality for many buyers is that getting onto or up the housing ladder remains a challenge.
“There is a genuine opportunity for an affordability turning point in 2026, if lower inflation and reduced funding costs continue to feed into sharper pricing and more flexible products.
“In that environment, brokers and lenders will be central to helping borrowers
make the numbers work month to month and in ensuring that any improvement in affordability translates into people being able to buy or move.”
RIGHT INGREDIENTS FOR GROWTH
Chris Storey, chief commercial officer at Atom bank, said: “The small uptick in house prices reflect the stability of the market at the tail end of last year, particularly as the caution and uncertainty surrounding the Budget eased.
“While we are very much in the early days of 2026, the ingredients are there for more growth in the year ahead, with Rightmove having reported asking prices have seen their largest January jump on record.
“Vendors are coming to the market, and feeling more confident about their prospects not just of achieving a sale, but getting a good price in the process.”
ECOURAGING SIGNALS
Tony Hall, head of business development at Saffron for Intermediaries, said: “Today’s figures show a housing market that’s growth remained steady but subdued in the closing stages of 2025, with momentum easing towards year-end as the usual seasonal slowdown combined with Budget-related hesitancy weighed on buyer sentiment.
“More recently, however, market signals have turned more encouraging. After months of modest annual growth, we have seen a notable uptick in asking prices in January, which may help set the tone for the year ahead.
“With the dust settling on the Autumn Budget and expectations of further rate cuts growing, confidence is beginning to return.
“For buyers looking to act as conditions improve, expert mortgage advice will be crucial to securing the right deal in what could be a more active 2026 market.”
MARKET SET FOR A BOUNCE
Tomer Aboody, director of specialist lender MT Finance, said: “With the Budget now out of the way, the uncertainty and hesitancy is also over and buyers are ready to make their move.
“Despite a lot of negative speculation beforehand, the Budget left the property market mostly unscathed.
“With sellers coming to the market and buyers who have delayed moves now ready to proceed, as well as lower mortgage rates, the scene looks set for a bounce.
“With the money markets expecting another base rate cut from 3.75%, although perhaps not at the February meeting of the Bank of England given the latest inflation figures, the improved affordability this will bring when it comes will encourage movement – and the market needs that encouragement.”
PRESSURE NOT GONE AWAY
Alex Upton, managing director, specialist mortgages and bridging Finance, Hampshire Trust Bank, said: “While the latest ONS data shows a slowdown in rental growth, the underlying pressure has not gone away. Demand remains strong, supply is still tight, and that imbalance continues to feed through into pricing.
“Landlords are facing a growing list of considerations. The Renters’ Rights Act, combined with tax and cost pressures confirmed in the Budget, including changes to mortgage interest relief and dividend taxation, is prompting many to take a more strategic view of their portfolios.
“Some are moving into limited company structures, others are rebalancing into semi-commercial or mixed-use assets, and many are reshaping how their funding aligns with long-term plans.
“Brokers are playing a central role in this shift.”
“Brokers are playing a central role in this shift, helping landlords navigate complex changes, structure sustainable funding, and stay confident in a market that is becoming harder to predict.
“The private rented sector cannot function without adequate supply. Tenants rely on good-quality homes, but that supply depends on investors being able to operate with clarity and stability.”
LANDLORD EXIT
And she add: “If the combined effect of regulation, taxation and cost becomes too great, we risk seeing more landlords exit and availability fall further.
“For lenders, this puts the emphasis on flexibility, consistency and real-world structuring. Brokers and landlords need funding that reflects the dynamics of today’s market, from portfolio restructuring and reinvestment to more complex transitions between short-term and long-term funding.
“The focus must be on enabling good deals to progress.”
“The focus must be on enabling good deals to progress, not defaulting to rigid criteria that reduce options. In a market shaped by structural change, specialist lenders have a critical role to play in supporting tailored, long-term solutions.
“Raising standards is essential. But if we want a rental market that remains accessible and resilient, we need a regulatory and funding environment that gives landlords and brokers the confidence to stay invested.”
PLENTY TO SHOUT ABOUT
John Phillips, CEO of Just Mortgages and Spicerhaart, said: “The mortgage market has started 2026 with a spring in its step, as the pent-up demand of Q3&4 begins to release.
“There’s plenty for brokers to shout about at the moment with rates cut across all parts of the market and access to the most mortgage products since 2007 – particularly for first-time buyers.
“Lenders stand ready and willing to lend – brokers are ready to help buyers and movers navigate the market. It’s up to us to keep nurturing confidence and encouraging clients to push on with plans.
“We of course don’t know how the year will play out – particularly as President Trump continues to try and stake his claim to more territories and throw around more tariffs – but there’s definitely scope for more positive news in the mortgage market as the year progresses.”
