UK house price growth weakest since April 2024 after surprise December drop

‍British house prices unexpectedly fell by 0.4% in December to finish 2025 just 0.6% higher than ⁠the year before, the weakest annual growth since April 2024, monthly figures from mortgage lender Nationwide Building Society showed on Friday.

Economists polled by Reuters had forecast a 0.1% monthly rise to ‌leave prices ‌1.2% higher than in December 2024, slowing from a 1.8% annual price rise in November.

Nationwide Chief ‌Economist Robert Gardner said the slowdown in the year-on-year growth rate partly reflected strong price gains in December 2024 as well as the December 2025 price fall, and that the number of mortgages approved remained similar to levels before the COVID-19 pandemic.


"With ​price growth well below the rate of ​earnings growth and a steady decline in mortgage rates, affordability constraints eased somewhat, ‌helping to ‍underpin buyer demand," he added.

Nationwide expected annual house price growth ‍of 2-4% in 2026, he added.

Elliott Jordan-Doak, an economist at ‌Pantheon Macroeconomics, said he too expected house prices to pick up as property tax rises in finance minister Rachel Reeves' November 26 budget were limited to the most expensive homes, rather than being more widespread as some buyers had feared in the run-up.

"Moreover, the improvement in affordability from the Bank of England's cut to interest rates in December will ‍also be more fully reflected in January's data," he said.

The BoE cut its main interest rate to 3.75% from 4% on December 18, ‍and financial ⁠markets expect one or ⁠two more quarter-point cuts in 2026.

The average property price in the fourth quarter of last year was 273,077 pounds ($367,561), but ranged widely from 168,317 pounds in much of northern England to 529,372 pounds in London, where they rose 0.7% over the past year.

Northern Ireland saw the fastest price growth last year with 9.7% growth - reflecting price gains in areas across the border in Ireland - while the weakest performance was in eastern England where prices fell 0.8%.