The UK housing market experienced a slowdown at the start of 2025, with annual house price growth easing to 4.1 percent in January from 4.7 percent in December. Month-over-month, prices edged up by just 0.1 percent, reflecting the resilience of the market despite ongoing affordability pressures. The average UK house price now stands at £268,213, marginally lower than December's £269,426.

Affordability remains a key issue as first-time buyers continue to face significant hurdles. Mortgage payments for an average buyer represent 36 percent of take-home pay-well above the long-term average of 30 percent. High house prices relative to earnings, soaring rents and a persistent cost-of-living crisis, have made deposit-saving increasingly difficult. Consequently, 40 percent of first-time buyers rely on financial support from family or inheritance.

Despite these constraints, homeownership rates have remained stable at 65 percent, with outright homeownership rising due to demographic shifts. Younger buyers are still struggling, though ownership among 25-34-year-olds has improved from 36 percent in 2014 to 45 percent today. The housing market's resilience suggests continued demand, but affordability challenges could temper future growth. The latest update leaves the RPI and RPI-P at minus 19 respectively, meaning that economic activities are well behind market expectations in the UK.

The Nationwide House Price Index (HPI) provides house price information derived from Nationwide lending data for properties at the post survey approval stage. Nationwide house prices are mix adjusted; that is, they track a representative house price over time rather than the simple average price.

Home values affect much in the economy especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.

Although the Nationwide data are calculated similar to the Halifax method Nationwide substantially updated their system in 1993 following the publication of the 1991 census data. These improvements mean that Nationwide's system is more robust to lower sample sizes because it better identifies and tracks representative house prices. Historically, the data go back to 1952 on a quarterly basis and 1991 on a monthly basis.

Over long periods the Halifax and Nationwide series of house prices tend to follow similar patterns. This stems from both Nationwide and Halifax using similar statistical techniques to produce their prices. Nationwide's average price differs because the representative property tracked is different in make up to that of Halifax.