UK house prices fell 0.4% month-on-month in December with annual growth slowing to 0.6%, the slowest rate since April 2024, according to Nationwide
Jordan Coussins and Vicky Shaw Press Association Personal Finance Correspondent
10:45, 04 Jan 2026
UK house prices fell 0.4% month-on-month in December(Image: PA)
The UK housing market concluded 2025 on a “softer note,” with yearly price growth decelerating to 0.6% in December, down from 1.8% in November, according to an index.
The most recent increase represented the weakest performance since April 2024, Nationwide Building Society reported.
Property values dropped by 0.4% month-on-month on average, bringing the typical UK house price to £271,068 in December.
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Robert Gardner, Nationwide’s chief economist, commented: “Despite the softer end to the year, the word that best describes the housing market in 2025 overall is ‘resilient’.
“Even though consumer sentiment was relatively subdued, with households reluctant to spend and mortgage rates around three times their post-pandemic lows, mortgage approvals remained near pre-Covid levels.
“Stamp duty changes that took effect at the beginning of April created volatility through the spring and summer.
“Activity spiked in March as purchasers brought forward transactions to avoid paying additional tax and this led to some softness in the following months.
“However, the underlying picture was little changed as demand held up well throughout.”
In regional data, covering the fourth quarter of 2025, East Anglia emerged as the sole area in the index to experience an annual decline in house prices. Average property values there dropped by 0.8% yearly.
Mr Gardner noted: “At the other end of the spectrum, Northern Ireland continued to outpace the rest of the UK by a wide margin, with prices increasing by 9.7% over the year.”
He went on: “Despite these significant price gains, house prices in Northern Ireland are still around 5% below the all-time high recorded in 2007, while UK prices are almost 50% higher over the same period.”
Across England, the North West – encompassing regions like Cheshire, Lancashire and Greater Manchester – emerged as the strongest performer, with typical property values rising by 3.5% year-on-year.
Looking to the future, Mr Gardner noted: “We expect housing market activity to strengthen a little further as affordability improves gradually via income growth outpacing house price growth and a further modest decline in interest rates.”
Nationwide anticipates property values will climb by approximately 2% to 4% over the coming 12 months.
Ian Futcher, a financial planner at wealth manager Quilter, observed: “Although Christmas is now behind us, December itself is rarely a month that sees much momentum in the housing market.
“This year, that seasonal slowdown was amplified by the timing of the Budget.
“With key fiscal decisions pushed later into the year, many prospective buyers and movers chose to put plans on ice until they had clarity on the policy landscape, before then allowing those plans to slip further as attention turned to the festive period.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: “Hard-pressed borrowers will be hoping for January sales from lenders with lower mortgage rates as we kick off the new year – and the signs are promising.
“The trend in new mortgage pricing was downwards in December with the (Bank of England) base rate reduction already priced in to many new deals. Lenders are keen to attract new business and get 2026 off to a strong start.
“Market expectations are for another two or three base rate reductions this year. This will provide a welcome shot in the arm for the housing market.”
Nathan Emerson, chief executive of property professionals’ body Propertymark, commented: “Stable house prices provide a solid foundation for the year ahead, allowing buyers and sellers to make more informed decisions without the pressure of rapid price movements. As the market continues to adjust, this stability should support activity and confidence throughout 2026.”
Iain Mckenzie, chief executive of The Guild of Property Professionals, stated: “We expect market momentum to strengthen in the new year as improved affordability and greater certainty encourage more buyers and sellers to make their move.”
Tomer Aboody, director of specialist lender MT Finance, noted that the cost of moving is “putting off many from doing so, choosing to stay put and improve existing homes instead. Stamp duty in particular is a barrier to mobility.”
Nicky Stevenson, managing director at estate agent Fine & Country, said: “As we move into 2026, the market appears well placed for a steadier, more sustainable phase. With greater policy clarity following the autumn Budget and borrowing costs expected to ease further, there are solid foundations for activity to pick up again once the traditional spring selling season gets underway.”
Below are the average property prices during the fourth quarter of 2025 alongside yearly percentage changes, as reported by Nationwide Building Society:
- Northern Ireland, £216,919, 9.7%.
- North West, £225,665, 3.5%.
- Wales, £213,894, 3.2%.
- West Midlands, £250,865, 2.3%.
- Yorkshire and the Humber, £212,110, 2.3%.
- North East, £168,317, 2.2%.
- Scotland, £190,649, 1.9%.
- East Midlands, £238,183, 1.0%.
- London, £529,372, 0.7%.
- South West, £308,228, 0.5%.
- Outer South East, 0.1%.
- East Anglia, £269,912, minus 0.8%.