UK house prices continued their upward trajectory in January 2025, with growth recorded across all regions of the country.
The North East of England emerged as the standout performer, recording the highest annual inflation rate at 9.1 per cent, up from 6.9 per cent in December 2024, according to new data released by the Office of National Statistics.
England's average house price reached £291,000 in January, representing a 4.8 per cent increase (£13,000) compared to the same period last year.
This annual rise was higher than the 4.4 per cent recorded in the 12 months to December 2024.
Property prices have soared across the UK
GETTYThe latest figures show a strengthening housing market as the first quarter of 2025 progresses. Wales saw its average house price reach £210,000 in January 2025, marking a six per cent (£12,000) annual increase.
The principality experienced a sharp rise in its annual inflation rate due to contrasting monthly patterns - a 2.1 per cent fall in January 2024 followed by a 0.9 per cent rise in January 2025.
Northern Ireland demonstrated robust growth with prices averaging £183,000 in the fourth quarter of 2024.
This represented a significant nine per cent (£15,000) increase compared to the same quarter a year earlier. Scotland's housing market also performed well, with average prices reaching £187,000 in January 2025.
This reflected a 4.6 per cent (£8,000) annual rise, though lower than December's 5.9 per cent growth. London recorded the lowest regional house price growth at 2.3 per cent in the 12 months to January 2025.
This was still a significant improvement from the 0.4 per cent annual growth seen in December 2024. All English regions showed positive annual house price inflation in January 2025, reflecting widespread market strength.
The South East and East of England both recorded more modest growth compared to the northern regions.
The South West also saw steady price increases, contributing to the overall positive national picture
CEO of RAW Capital Partners Tim Parkes shared his optimism about the housing market. He said: “House prices continue to report positive annual growth, and this very much aligns with the market sentiment we are witnessing on the ground.
"Momentum built towards the end of last year, and activity levels have surged in early 2025. Despite next week’s changes to Stamp Duty thresholds, there's still optimism that the market will continue to perform well throughout the spring and summer months.
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The biggest house price jump was in Northern Ireland
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“Largely, this confidence stems from the Bank of England’s rate-cutting cycle. While rates were held at last week's meeting, markets anticipate at least two cuts before the year’s end, potentially bringing the base rate down to four per cent.
"The economic data the Chancellor will be revealing later today from the Office for Budget Responsibility announced alongside the Spring Statement will provide some important clues as to whether the Bank has the scope to proceed with these cuts.
“Regardless of what decision comes next, the sector is actively finding ways to facilitate investment, and today’s positive house price data should provide further encouragement. Lenders and brokers must now work together to ensure investors can access the finance they need to sustain this momentum into Q2 and beyond.”
