UK house prices increased 2.5% in the year to November 2025, signalling firmer conditions in the sales market despite continued affordability pressures, according to the latest figures from the Office for National Statistics.

The average UK home was valued at £271,000 in November, up from a revised annual increase of 1.9% in October.

The acceleration suggests renewed, albeit modest, momentum in transaction values heading into the final quarter of the year.

In England, average prices rose 2.2% to £293,000. Scotland recorded stronger growth of 4.5%, pushing average values to £193,000, while Wales lagged behind with a 0.7% increase, taking prices to £209,000.

FRAGMENTED MARKET

Scotland is now outpacing England in annual growth terms, while Wales is seeing near-flat price inflation. The UK-wide annual increase of 2.5% remains subdued compared with post-pandemic peaks but marks an improvement on earlier 2025 readings.

Although published alongside rental data showing private rents up 4.0% annually to £1,368, the sales market figures suggest house price inflation is running below rental growth, reinforcing ongoing affordability constraints for would-be buyers.

With prices rising 2.5% year on year and the average home now costing £271,000, the sales market appears to be stabilising rather than surging – a measured recovery rather than a rebound.

THE MARKET NEEDS A ROCKET

Tomer Aboody, director of specialist lender MT Finance, said: “While we are still seeing a slight increase in average house prices, the market still needs a rocket to boost it and push it forward.

 “The housing market in the UK will always maintain a certain level of activity due to demand outweighing supply, but to improve confidence and see some significant growth, we need a friendly government who will look to help the market either by easing off on stamp duty, helping investors by reducing the tax on rental income or via the Bank of England reducing interest rates further.”

RATE REDUCTIONS

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Mortgage pricing is currently proving to be dynamic with some lenders cutting rates while at the same time others are increasing rates.

“If the recent falls in Swap rates, which underpin the pricing of fixed-rate mortgages, continue, this should see the return of more reductions and lower fixed rates across the board, which will give borrowers a further boost.”

STEADY IMPROVEMENT

And Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “This is the most comprehensive snapshot of all the housing surveys as it includes approximately 40% of cash as well as mortgages sales, showing a steady rather than spectacular improvement in prices.

 “Although a little dated, it reflects the period just before and after the Budget so demonstrates considerable buyer and seller resilience at a time of economic uncertainty which we also noticed on the ground.

“Looking forward, December’s modest reduction in interest rates and the prospect of further cuts over the next few months have given the market a lift. However, the amount of stock available and likelihood of even more choice given the increasing number of appraisals, will keep any price increases firmly in check.”