As we enter 2025 we can conclude that house prices rose last year by a modest 1.4% according to Rightmove. The majority of analysts predicted that house prices would fall, so even though the market did not show any remarkable gains it is positive to see that the stories of doom and gloom did not materialise. According to Rightmove, during December the average house price fell by 1.7% and that was following a previous two months of falls, the positive start to 2024 was largely erased by the final quarter of the year.  The start of 2025 may see a flurry of activity as many house buyers will be looking to complete before the Stamp Duty thresholds change in April. 

Last year the base rate was cut by a further 0.25% during November and it now stands at 4.5%. This rate cut was already anticipated and it seems that people are disappointed that rates haven’t fallen further. It is still expected that the Bank of England will reduce the base rate further during 2025 and that will allow more buyers to afford a more expansive home and possibly push house prices up. Currently the average five year fixed mortgage stands at 5.26% which is still higher than the average mortgage rate of a couple of years ago. If mortgage rates continue to fall it will make buying a house more accessible for many, in theory this should get the property market moving faster.

Certain costs for homeowners may still hold the market back, inflation at the shops and higher energy bills have caused a cost of living crisis. Inflation is now at 3.5% for November this is significantly lower than the peak of 9.6% that was seen in 2022. The lower rate of inflation has not transferred into more consumer spending at the shops and consumer spending has fallen by 0.2% during December, which is an improvement from Novembers figures which showed a decline of 2. There is still the cost of living crisis that includes increased energy costs, council tax and other bills that is giving less disposable income for potential property buyers.

What Are the Current House Price Figures?

In the UK there are various different sources that analyse the market and produce average house price figures with differing results so here’s a look at what each index has reported:

Halifax

The Halifax House Price Index reported in December shows that house prices fell by 0.25%.  According to Halifax the average house price now stands at £297,166. December’s figures marks the end of the year and according to Halifax the property market showed an annual improvement of 3.3%. After seeing five consecutive months of house price growth Decembers figures show the first decline for quite some time, be it just a very modest fall in the national house price, particularly as it follows Novembers figure which showed an all time high. The Halifax national house price can seen in the chart below:

Halifax Price Index Dec 2024

Nationwide

The Nationwide House Price index for December shows a “strong end to the year” with house prices ending up 4.7% higher in 2024. In addition for December house prices showed a monthly rise of 0.7% . The UK experienced higher growth in the the North of England when compared to the South. It is predicted that the first few months of 2025 will have a lot of activity between buyers and sellers as people try to complete before the Stamp Duty changes which take place in April. The report for December 2024 shows that the national house price ended up at £269,426.

Nationwide House Price Index Dec 2024

Zoopla

Similar to Rightmove, Zoopla record advertised “For Sale” prices so they are always more optimistic than Land Registry results and prices that are reported by mortgage lenders. Zoopla are reporting that house prices ended 2024 1.4% higher than the previous year. According to Zoopla the average house price currently stands at £267,500 as of November. Zoopla predict that the property market will rise by 2.5% during 2025.

Zoopla House Price Chart December 2024

Rightmove

House Prices on Rightmove are based on asking prices and the UK average now stands at £360,197. Decembers’ figures show a large monthly fall of £6395. Rightmove show that house prices ended up 1.4% higher than the previous year. The full report for December can be seen here.

Office of National Statistics

The Office of National Statistics now reports data in a report that is called Private Rent and House Prices. The data for December shows that over the past year the national house price has increased 3.4% and stands at £292,000. These figures are delayed by a couple of months and reflect what happened in October as they are based on completed prices. 

Should You Buy a House in 2025 or Wait?

Last year the market analysts had a rather pessimistic view on the housing market and had largely predicted that the national house price would end up lower than 2023. They were proven wrong and the national house price in 2024 ended up higher by all the different indices. 

For 2025 there is an optimistic view from all the analysts who have a positive outlook on property prices with zero negative predictions. The most optimistic view can be seen from Rightmove who predict a 4% rise in house prices and the general average consensus from the different analysts seems to be at around a 2.5% price rise. 

The year is expected to start off with a lot of transactions and a scramble to complete before stamp duty hikes in April. There is also the expectation that Interest rates will fall further as has been expressed by The Bank of England towards the end of last year. We have however entered 2025 with some negative news regarding growth and inflation which is largely due to the measure’s set out in the Autumn budget, therefore people are starting to doubt that The Bank of England will reduce interest rates as was expected. In conclusion it seems that now is a good time to buy a house but prices may not rise as quickly as expected if Interest rates remain high and the rate of inflation isn’t kept at around 2%.

Here are some of the the predictions of how far house prices could rise or fall during 2025: