The UK housing market in September 2025 reflected a mild correction and underlying stability. Average house prices fell marginally by 0.3 percent (£794) to £298,184, reversing part of August's gain but maintaining a slight cumulative rise of 0.3 percent since January. Annual growth slowed to 1.3 percent, the weakest since April 2024, indicating a market that is steady rather than slumping. Regional and property variations continue to shape affordability, with first-time buyers paying an average of £236,811, 1.7 percent higher than a year ago, suggesting some resilience in entry-level demand.

The report attributes stability to easing mortgage rates and sustained wage growth, which together have bolstered buyer sentiment despite broader economic uncertainty. While affordability pressures persist, these gradual improvements suggest that demand has not collapsed, but rather adjusted to a more sustainable pace. In summary, the data portrays a housing market in a soft landing phase, cooling after previous volatility yet supported by improved financial conditions, signalling modest but positive momentum toward year-end.

The Halifax House Price Index (HPI) is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.

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.