The UK housing market performed broadly in line with expectations over the last year, with limited price growth and transaction levels close to pre-pandemic norms, according to Halifax.
Annual house price growth of 0.7% lifted the average UK property price to a new record high of £299,892 in the year to November, up £2,221 from £297,671 a year earlier.
Halifax said this marked one of the most stable years for house prices over the past decade, despite ongoing affordability pressures and economic uncertainty.
Amanda Bryden, head of Halifax Mortgages, said: “2025 was one of the most settled years for UK house prices over the last decade.
“The average UK home now costs £299,892, up just +0.7% over the year, reaching a new record high price.”
Market activity over the year was shaped by changes to stamp duty thresholds in the spring, which triggered a surge in completions ahead of the deadline.
Bryden said March was “one of the busiest months ever for completed transactions”, although this spike did not translate into higher prices and activity levels soon returned to normal.
Affordability remains challenging, but Halifax said conditions have improved compared with recent years, supported by above-inflation wage growth, easing mortgage rates and some expansion in lending criteria.
Bryden said: “While affordability remains challenging, the picture has improved compared to recent years, driven by a combination of above-inflation wage growth, lower interest rates and some expansion of eligibility criteria from mortgage lenders.”
For first-time buyers, Halifax said monthly mortgage costs as a share of income are now at their lowest level since 2022.
The rate on a typical 2-year first-time buyer mortgage at 90% LTV has fallen by around 0.8% over the past year, while prices paid by first-time buyers rose by 1.1% annually to an average of £236,836.
The second half of the year was marked by uncertainty ahead of the Autumn Budget, with speculation around potential tax rises dampening confidence.
However, Halifax said both prices and activity broadly held steady during this period.
Regional performance was mixed. Northern Ireland recorded the strongest annual price growth at 8.9%, while Greater London saw the largest decline, with average prices falling by 1.0% over the year.
Looking ahead, Halifax expects modest price growth to continue. Bryden said: “Looking ahead to 2026, we expect house prices to rise modestly, by somewhere between 1% to 3%.
“While wage growth is expected to slow and unemployment may edge higher, lower interest rates and easing inflation should help to gradually improve homebuyers’ purchasing power.”
Mary-Lou Press, president of NAEA Propertymark, said the market had shown resilience despite elevated borrowing costs and pressure on consumer confidence.
She said: “Greater affordability, supported by stronger wage growth relative to house prices and improved access to higher loan-to-value lending, has played a crucial role in keeping buyers active, particularly those entering the market for the first time.”
