After all the speculation, January’s housing data provides the first real glimpse of how 2025’s property market is developing and there has been a surprisingly strong start to the year.

However, there is some notable regional variation. While some areas show encouraging signs of growth, others face ongoing price pressure due to stretched affordability and changing buyer behaviour, especially in the South.

Halifax reports the average property price reached £299,138 in January – a 0.7% monthly increase and 3% annual growth. Nationwide shows similar annual growth at 4.1%, but with a more modest monthly rise of 0.1%.

Zoopla’s data is one month behind but shows a 2% annual increase, with average prices at £267,700. The portal is also reporting a 13% rise in buyer demand compared to last year, alongside a 10% increase in available properties.

And Rightmove’s data, which runs ahead of the others, shows asking prices jumping 1.7% (+£5,992) in January to £366,189 – the largest new year increase since 2020.

Northern Ireland is the region with the highest growth at 7.7% and the North West saw a 3.2% increase, while southern regions tended to have sub 1.5% growth. First-time buyers, though, remain particularly active ahead of April’s stamp duty changes, when the threshold reduces from £425,000 to £300,000.

Buoyed by the base rate cut and the potential for more, Rightmove is now forecasting average asking prices will increase by 4% in 2025, with transaction levels expected to reach 1.15 million, though the market’s performance will continue to vary significantly by region.

HOUSE PRICES AND STATISTICS

Positive start to year is evident in house price indices.

Nationwide: Jan: Avg. price £268,213. Monthly change +0.1%. Annual change +4.1%.
Halifax: Jan: Avg. price £299,138. Monthly change +0.7%. Annual change +3.0%.
Land Registry: Nov: Avge. price £289,707. Monthly change -0.4%. Annual change +3.3%
Zoopla: Dec: Avg. price £267,700. Annual change +2%.
Rightmove: Jan: Avg. price £366,189. Monthly change +1.7%. Annual change +1.8%. (asking prices on Rightmove)

BUY-TO-LET

The slowdown in the rental market which began in the latter part of 2024 has continued into 2025.

HomeLet’s data reveals the average rent fell by 1.0% between December and January to £1,271 per month, with annual growth slowing to just 0.9%.

London has experienced an even sharper decline, with rents falling 2.2% over the New Year and dropping 2.7% compared to January 2024. At the opposite end of the spectrum, the West Midlands has emerged as the fastest-growing region with a 7.9% annual increase.

Zoopla’s latest data also shows rental inflation has slowed across all regions except Northern Ireland, whose growth has climbed as high as 10.5%, followed by the North East at 8.7%. London’s average rent of £2,190 per month, on the other hand, is just 1.3% higher than it was last year, down from 8.7% the year before.

One of the key causes of the softening of rents is that the supply-demand imbalance is finally narrowing, with Zoopla reporting available rental properties up 12% year-on-year, although that is still 18% below pre-pandemic levels. Demand for rented homes is 29% lower than last year but remains 31% higher than pre-pandemic levels.

Looking ahead, the portal is now forecasting rents will rise by 4% over the next twelve months, with stronger growth expected in more affordable areas.