UK house prices rose by 3.9% in the 12 months to May 2025, with the average property now valued at £269,000, according to the latest data from the Office for National Statistics and HM Land Registry.
The provisional estimate shows prices climbing by £10,000 year-on-year, with monthly growth also accelerating to 1.1%.
Scotland and Northern Ireland led the growth, with average prices up 6.4% and 9.5% respectively. In England, the average property value rose to £290,000 – an annual increase of 3.4% – while prices in Wales grew 5.1% to £210,000.
Regionally, the North East recorded the highest annual inflation in England at 6.3%, whereas the South West saw the weakest performance, with prices up just 1.9% year-on-year.
SUBDUED SENTIMENT
The figures come despite subdued sentiment in the housing market. The Royal Institution of Chartered Surveyors (RICS) reported that momentum in the sales market remains “relatively soft,” with prices largely flat at the national level.
Transaction volumes, however, rebounded strongly in May following a slump in April, which had coincided with changes to Stamp Duty Land Tax (SDLT). According to HMRC, residential property transactions rose by 25.1% on a seasonally adjusted basis between April and May, reaching an estimated 81,000. This figure remains 11.8% below May 2024 levels, suggesting the market has not fully recovered.
LARGEST GAINS
England and Northern Ireland saw the largest month-on-month gains in activity, with non-seasonally adjusted transaction volumes up 52.0% and 51.2% respectively. In contrast, Scotland and Wales posted more modest increases.
The Bank of England reported that mortgage approvals for house purchases – a key indicator of future market activity – rose for the first time since December 2024. A total of 63,000 approvals were recorded in May, up 2,400 from the previous month.
Despite the recent uptick in prices and lending activity, the Bank’s agents reported ongoing uncertainty among prospective buyers, with broader economic concerns and recent tax changes still weighing on confidence.
ECONOMIC HEADWINDS
Marc von Grundherr, Director of Benham and Reeves, says: “The latest sold price data show that the monthly rate of house price growth bounced back in May, following a brief period of decline in the wake of the recent stamp duty deadline.
“This demonstrates that the appetite of the nation’s homebuyers is yet to diminish and they remain motivated to push on with their plans to purchase despite the higher cost of stamp duty when doing so.
“At the same time, the market continues to demonstrate stability and resilience on an annual basis, with house prices remaining higher than they were this time last year, despite the strengthening economic headwinds that we’ve had to contend with.”
ON THE FRONT FOOT
Verona Frankish, Chief Executive of Yopa, adds: “The latest house price figures for May demonstrate a market that is very much on the front foot and ready to build on the momentum gained in recent months, particularly now that the distraction of another stamp duty deadline is behind us.
“This underlying resilience provides a solid platform for future growth, which will only be strengthened by the announcement this week of the Government’s mortgage market reforms.
“By easing mortgage lending criteria, these changes will broaden access to finance, helping to attract more buyers into the market and support continued house price growth over the remainder of the year and beyond.”
