The UK housing market maintained steady growth in February 2025, with house prices rising 3.9 percent year-over-year, slightly below January's 4.1 percent growth. The 0.4 percent monthly increase, marking the sixth consecutive rise, suggests resilient demand despite affordability challenges.

Housing transactions in 2024 rebounded by 14 percent year-over-year, reflecting renewed buyer confidence, though activity remains 6 percent below pre-pandemic levels. Notably, first-time buyer activity recovered, with mortgage completions just 5 percent below 2019 levels, despite higher mortgage rates of 4.4 percent compared to 2 percent in 2019.

Cash transactions surpassed pre-pandemic levels by 2 percent, indicating continued market strength, particularly among investors. Meanwhile, buy-to-let purchases involving mortgages gradually rose, fuelled by rental price increases and easing mortgage rates. However, regulatory uncertainties and higher transaction costs may be tempering investment enthusiasm.

Looking ahead, April's stamp duty changes will likely distort transaction patterns, with a surge in March followed by a slowdown. This cyclical trend mirrors past tax policy shifts, emphasising the delicate balance between market incentives and long-term stability. The latest update leaves the RPI at 39 and the RPI-P at 29, meaning that economic activities are well ahead of the consensus of the UK economy.

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.