UK house prices increased by 2.4 percent in the year to December 2025, bringing the average property value to £270,000, according to the latest official data from the Office for National Statistics.
The figures show a market finding its balance after years of volatility. Monthly values dipped 0.7 percent compared with November, reflecting typical seasonal quietening ahead of the Christmas period rather than any fundamental weakness in demand.
Regional divide widens
London was the only region to record an annual fall, with prices down 1 percent to an average of £551,294. The capital continues to bear the weight of higher taxation and tighter regulation, which has cooled investor appetite over the past two years.
The North East led the country with 4.6 percent annual growth, continuing a trend that has seen northern regions outperform the South. Across England, prices rose 1.7 percent to £292,000, while Wales saw growth of 5 percent to £215,000 and Scotland climbed 4.9 percent to £191,000.
Northern Ireland posted the strongest annual increase at 7.5 percent in the fourth quarter, with average values reaching £196,000.
First-time buyers drive demand
Verona Frankish, chief executive of Yopa, said the data shows first-time buyers “continuing to drive a relatively stronger degree of price appreciation, which highlights their determination to realise the dream of homeownership.”
For landlords, the sustained activity from first-time buyers suggests continued tenant churn as renters transition to ownership where affordability allows. This dynamic can create both void periods and opportunities to reset rents to market levels.
Nick Leeming, chairman of Jackson-Stops, said clarity from the Autumn Budget “is now beginning to translate into greater confidence” among buyers. “Buyers are approaching decisions with more certainty around taxation and fiscal policy, even as affordability remains front of mind,” he said.
Market outlook for 2026
Iain McKenzie, chief executive of The Guild of Property Professionals, pointed to transaction levels remaining “robust” with over 100,000 sales in December alone. Activity across 2025 ran above both 2024 and pre-pandemic norms, he noted.
“Rising wages, easing borrowing costs and a highly competitive mortgage market are expected to support activity levels this year,” McKenzie said. “At the same time, a growing supply of homes for sale is giving buyers more choice and will help keep price growth at a sustainable pace.”
The data arrives as inflation dropped to 3 percent, increasing market expectations of a Bank of England rate cut at its March meeting. Lower borrowing costs would support both buyer affordability and landlord refinancing conditions.
Stacy Eden, head of real estate at RSM UK, noted the market remains “static” when viewed over a longer horizon – prices are only 3.6 percent higher than January 2023. “Concerns around the Autumn Budget continued to have a clear impact on December prices,” she said.
Editor’s view
The regional divergence tells a familiar story for landlords: northern markets offer stronger yields and capital growth, while London faces headwinds from taxation and regulation. With official data now confirming what indices have suggested for months, portfolio strategy in 2026 should account for this north-south split.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 19 February 2026
Sources: Office for National Statistics, Yopa, Jackson-Stops, The Guild of Property Professionals, RSM UK
Related reading: Central London property values fall 12% as tax burden bites
