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House prices took a mild dip in February, but forecasts suggest a steady upward trend throughout the rest of the year in Halifax.

February saw a minuscule 0.1% drop in house prices, as the shrinking timeframe to benefit from stamp duty changes took its toll. However, an ongoing supply-demand imbalance could culminate in a price increase for the year as a whole.

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February saw a minor decrease of 0.1% in house prices as buyers rushed to complete purchases before...
February saw a minor decrease of 0.1% in house prices as buyers rushed to complete purchases before stamp duty changes, leaving a smaller window for future transactions. Yet, an unbalanced ratio of supply to demand could lead to a surge in house prices throughout the year.

House prices took a mild dip in February, but forecasts suggest a steady upward trend throughout the rest of the year in Halifax.

Revamped Report:

UK Housing Market Snapshot

Here's a fresh look at the state of the UK housing market in early 2025, packed with insights and analysis to stay informed! After all, being in the know is the key to scoring that dream home or making smart investment decisions.

February's Market Pulse

In February, the housing market took a slight breather, with house prices dipping by 0.1% on a monthly basis, according to mortgage lender Halifax. This followed a 0.6% growth in January. On an annual basis, house price inflation remained steady at 2.9%, making the average UK property price £298,602.

Is the Stamp Duty Rush Over?

With the upcoming stamp duty deadline approaching, experts warned that homebuyers were running out of time to lock in lower tax rates unless they'd already started the conveyancing process. Despite the chatter about a last-minute buying spree to beat the April deadline, many of these transactions started to dwindle as the deadline drew closer, given the typical timeline to complete a purchase.

Will the Party Last?

Amid this shift, the overall housing market remains resilient, as economists anticipate further interest rate cuts this year, prompting mortgage rate reductions. Although rates remain elevated compared to their historic average, sub-4% deals have returned this year. Loosening affordability constraints, partially thanks to wage growth outpacing house price inflation last year, is keeping activity levels healthy.

The Game of Supply and Demand

Looking ahead, Halifax predicts an imbalance between supply and demand, fuelling house price increases. This growth may be more measured compared to the previous year, when house prices in the UK rose by 3.3%.

Industry heavyweights have varying forecasts for 2025. Real estate consultant Savills predicts a 4% overall increase, with the fastest growth happening in the North West, North East, Yorkshire and the Humber, and Scotland. Meanwhile, Knight Frank forecasts a lower growth rate of 2.5%.

Stamp Duty Snapshot

Buyers have enjoyed lower stamp duty costs in recent years, but thresholds for the controversial tax are set to drop in April. This means more will be paid when buying a property. As of now, buyers pay nothing on properties worth up to £125,000 (£250,000 for first-time buyers). However, these thresholds will revert to their original values of £125,000 and £300,000 for regular and first-time buyers, respectively, starting April 1st.

On the Brink?

Property website Zoopla warned that it's likely too late for buyers to agree and complete a property purchase to make the April deadline, if they haven't already started the process. Economists expect a surge in transactions in March as the final buyers wrap up before the deadline, followed by a potential dip in the coming months.

Of the UK nations, Northern Ireland continues to top house price growth charts, with prices rising by 5.9% year-on-year in February, bringing the average property price to £205,784. Scotland saw growth of 3.8%, up from 2.5% in January, taking the average house price to £213,014. Wales recorded a 2.8% increase, with the average property costing £226,811, while England grappled with a north-south divide, as shown by the 4.1% annual growth in Yorkshire and the Humber (average property price: £216,130). London lags behind, with annual growth of 1.6% (average property price: £545,183).

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[1] Knight Frank. (2025). UK Residential Market Forecast 2025. https://www.knightfrank.com/research/uk-residential-market-forecast

[2] Halifax. (2025, March 18). House prices fall by 0.1% in February. https://www.halifax.co.uk/media/news/house-prices-fall-by-0-1-in-february/

[3] Savills. (2025). UK Housing Market Outlook 2025. https://www.savills.co.uk/-/media/files/global/research/2025/uk_residential_market_outlook_2025.pdf

[4] Lloyds Bank. (2025). UK House Price Index. https://www.lloydsbank.com/mortgages/advice-and-tools/house-price-index.aspx

[5] Capital Economics. (2025). UK Housing Market Forecast. https://www.capitaleconomics.com/researchparts/uk/uk-housing-market-forecast

  1. With the UK housing market remaining resilient, individuals interested in personal finance and investing may find opportunities in real-estate, especially considering the anticipated interest rate cuts this year that could lead to mortgage rate reductions.
  2. Amidst the shift in the UK housing market, property buyers need to be aware of the upcoming changes in stamp duty thresholds, set to drop in April, which may result in higher costs for those purchasing properties.
  3. Looking at regional growth trends, the North West, North East, Yorkshire and the Humber, and Scotland are expected to experience the fastest growth in the UK housing market in 2025, according to real estate consultant Savills.

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