"While house price growth has slowed overall, market activity remains strong and comparable to pre-pandemic levels, demonstrating a resilience amongst buyers that’s been evident in the face of higher borrowing costs"
- Amanda Bryden - Halifax
The latest figures released by Halifax this morning have shown that average house prices remained largely unchanged over the past month, slightly dipping by -0.1% in February and bringing the price of a typical UK home down to £298,602 (compared to £298,815 in the previous month).
National and regional breakdown
Most areas of the UK saw a slowdown in house price inflation in February.
Bucking the trend most notably was Scotland, which saw annual growth increase to +3.8% compared to +2.5% in January, with an average house price of £213,014.
Northern Ireland continues to have the strongest annual property price growth in the UK, largely unchanged at +5.9% in February. Properties in Northern Ireland now cost an average of
£205,784.
House prices in Wales were up +2.8% compared to the previous year, with properties valued at an average of £226,811.
In England, Yorkshire and Humberside recorded the strongest annual property price growth for the first time since July 2021, up +4.1% compared to the previous year, with properties now costing an average of £216,130.
London saw annual house price growth ease considerably from +2.6% in January to +1.6% in February. The capital still has by far the most expensive average property price in the UK, at
£545,183.
“The typical UK house price remained stable in February, with a slight monthly dip of -0.1%. Annual growth also held steady at +2.9%, with the average house price edging down by just £213 to £298,602," comments Halifax head of mortgages Amanda Bryden, “February's figures highlight the delicate balance within the UK housing market. While there’s been talk of a last-minute rush on new mortgages ahead of the changes to stamp duty, inevitably we’ve seen some of the demand that was brought forward start to fade as the April deadline ticks closer, given the time needed to complete a purchase.
“That may help to explain why growth in first-time buyer property prices eased in February, falling to +2.4%, in contrast to home mover price inflation which accelerated, reaching +3.7%
She adds, “While house price growth has slowed overall, market activity remains strong and comparable to pre-pandemic levels, demonstrating a resilience amongst buyers that’s been evident in the face of higher borrowing costs.
“While those affordability challenges persist, the ongoing shortage of housing supply coupled with sustained demand suggests property prices will continue to rise this year, albeit at a more measured pace compared to last year.”
Industry reaction
Tom Bill, head of UK residential research at Knight Frank, said: “Despite a rush to complete ahead of the stamp duty increase in April, supply outpaced demand in the first two months of this year, which kept downward pressure on house prices.
"That pressure will be sustained if more inflation creeps into the UK economy through measures such as raising employer national insurance contributions. We were also reminded this week of how global politics can act as a brake on the market when Germany announced a defence spending increase, which pushed up borrowing costs in Europe. We expect low single-digit house price growth this year but the outlook is changeable.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman says, “A strong appetite to buy for some is almost matched by others wanting to ensure the increasing availability of stock has been properly appraised and best terms negotiated before proceeding.
“Prices, especially for houses, are holding up well, supported by income growth exceeding inflation but will come under pressure, particularly now it is probably too late to take advantage of the stamp duty concession.
“Employer concerns about increasing national insurance and minimum wage commitments are not helping confidence either."
Iain McKenzie, CEO of The Guild of Property Professionals comments, “It’s encouraging to see the housing market's continued resilience as we move into 2025, with both transaction levels and sales agreed figures showing year-on-year growth at the start of the year.
“The market remains active, driven by first-time buyers rushing to complete deals ahead of stamp duty changes and needs-based buyers who postponed decisions during 2024’s volatility. Strong earnings growth is also supporting activity. However, a greater supply of homes for sale and the impending stamp duty deadline are expected to keep price inflation in check.
“Both demand and supply have increased across all property types, though market dynamics vary. Detached houses are in growing demand, with an 18% year-on-year rise in the demand-to-supply ratio, while demand for flats has slightly declined since January 2024.
“Despite higher-than-expected CPI inflation, the Bank of England cut the base rate to 4.5% in early February, prompting several major banks to follow suit. This comes as a welcome relief after fixed-rate mortgage rates rose in early 2025, with some lenders reversing the cuts made in late 2024 following gilt yield spikes. Now, this trend appears to be shifting, with the lowest fixed-rate mortgages dipping below 4% for the first time in months as competition among lenders intensifies.”
Tanya Elmaz, Director of Sales at Together comments, “House prices slumped after an initial rebound, falling 0.1% in February. It's surprising considering the activity in the market as buyers race to beat the looming Stamp Duty deadline. We expect to see a further drop when this comes into effect next month.
“In addition, while interest rates are expected to fall further this year, inflation remains volatile, meaning mortgage rates could remain higher for longer, which could delay some buyers getting onto or stepping up the housing ladder. There is also the consideration that news from across the Atlantic changes daily, so predicting what will happen to the market is increasingly difficult.
“That said, there are plenty of opportunities out there, whether that be for aspiring homebuyers or landlords looking to invest. Those keen to move forward with their property plans are best to consider the wide range of financial products available, like Shared Ownership or bridging loans for fast, flexible finance.”
Matt Thompson, head of sales at Chestertons says, “In February, the property market saw a higher volume of enquiries from parents who are looking for a property in catchment areas of highly-rated state schools. This resulted in larger-family homes attracting interest from multiple buyers.
"With the introduction of sub-4% mortgages, we also witnessed growing buyer confidence amongst second-steppers and, despite to the looming changes to Stamp Duty, still registered a number of first-time buyers who are eager to get on the property ladder.”
