UK house prices slowed sharply at the end of 2025, with annual growth easing to 0.6% in December, down from 1.8% a month earlier, according to the latest Nationwide index. For landlords, the cooling may signal a shift towards more favourable buying conditions as mortgage affordability gradually improves and regional markets continue to diverge.
The average UK home now stands at £271,068, with December’s figure marking the weakest annual growth rate since April 2024. A year earlier, prices were rising at 4.7%, highlighting how much the market has cooled over 12 months.
Nationwide’s chief economist Robert Gardner argued the market had demonstrated resilience despite the late-year slowdown. He noted that “consumer sentiment was relatively subdued”, and that mortgage rates were still “around three times their post-pandemic lows”, yet mortgage approvals hovered near pre-Covid levels. According to UK Finance data, approvals in late 2025 averaged roughly 58,000 a month, only slightly below historic norms.
Price stability can be more constructive than the rapid inflation seen earlier in the decade. Softer capital values may help improve yields, particularly in regions where rents have grown faster than sale prices.
Regional house price performance and implications for landlords
Nationwide’s quarterly breakdown shows a widening divide between the UK’s strongest and weakest regions. East Anglia recorded a 0.8% annual fall, the only region to dip into negative territory. At the opposite end of the spectrum, Northern Ireland continued its exceptional run, posting 9.7% annual growth and outperforming all other regions for the third year running.
Across the UK, prices were up 1.7% in Q4 2025 compared with a year earlier. Scotland broadly matched that trend at 1.9%, while Wales delivered solid growth of 3.2%.
In England, annual growth slipped to 1.2%, but northern regions remained well ahead of the south. Prices in the North and Midlands rose 2.3% year on year, driven in part by stronger rental demand and better yields. The North West led with 3.5% growth, while southern England managed just 0.6%.
London rose by a muted 0.7%, reflecting ongoing affordability constraints and a slower recovery in buyer sentiment.
The property type breakdown also tells a familiar landlord story:
- Semi-detached homes: +2.4%
- Detached homes: +2.2%
- Terraced homes: +1.8%
- Flats: –0.9%
With flats continuing to underperform, many landlords are shifting focus toward family homes, where tenant demand remains more stable.
Market reaction
Market commentators agree that the cooling does not signal a downturn but rather a settling period after a volatile 2025. Propertymark CEO Nathan Emerson said falling inflation and easing base rates had “helped more buyers consider their next move during 2026”, despite the legislative and economic turbulence of the previous year.
Iain McKenzie, CEO of The Guild of Property Professionals, described conditions as a “gentle cooling” rather than a loss of resilience, arguing the market performed “remarkably steady” despite Budget uncertainty and a rise in supply.
North London estate agent Jeremy Leaf, a former RICS residential chairman, said improvements in affordability had helped “stir buyers and sellers from their seasonal hibernation”.
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance.
Published: 5 January 2026
Sources: Nationwide, UK Finance, Propertymark, The Guild of Property Professionals, RICS
Related reading: House prices: 2026 outlook points to steady growth and stronger buyer demand
