Key figures
The average house price in the UK is £267,200 as of January 2025 (published in February 2025).
Property prices are now at +1.9% inflation compared to a year ago and the average UK house price is set to rise by 2.5% by the end of the year.
Property type | Average house price in January 2025 | Average house price in December 2024 | Average house price in November 2024 | Annual price change (£) | Annual price change (%) |
All property | £267,200 | £267,200 | £267,100 | £4,990 | 1.9% |
Detached houses | £448,500 | £448,700 | £448,400 | £7,300 | 1.7% |
Flats | £191,300 | £191,700 | £191,700 | £1,040 | 0.5% |
Semi-detached houses | £273,700 | £273,200 | £273,600 | £7,390 | 2.8% |
Terraced houses | £236,100 | £235,900 | £235,900 | £6,340 | 2.8% |
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Sales activity higher but rate of house price inflation dips
The sales market continues to register positive momentum, with all key measures of market activity running 10-11% higher than a year ago. The number of sales agreed is 10% higher, and the number of homes for sale is up 11% compared to a year ago, meaning there are now more buyers in the market.
Increased levels of housing market activity mirrors other measures of economic activity, including robust earnings growth, higher retail sales and signs that consumer confidence is on the rise.
But while market activity continues to increase, the annual rate of house price inflation is edging lower. It increased +1.9% in the 12 months to January 2025, down from +2.0% in December 2024.
House price inflation continues to follow a north-south divide. Average prices are 7.2% higher in Northern Ireland and 3% higher in the North West. However, house prices across London and southern England have only risen by 1% to 1.2% over the last year.
House price inflation slowed across most regions of the UK in January. This reflects the sharp dip in consumer confidence in the wake of the Autumn 2024 Budget, and mortgage rates rising by 0.5% since September 2024.
Stamp duty impact starts to feed through
The moderation in house price inflation may also reflect buyers starting to factor in higher stamp duty rates.
From April 2025, half of homeowners will have to pay an extra £2,500 per purchase, while another third will pay up to this level.
40% of first-time buyers will also pay more stamp duty, up from 20% today.
Home buyers will expect to reflect this extra cost in their offers, typically looking to split the cost with the seller.
In monetary terms the differences are not large, but the overall impact of these stamp duty changes will keep house price inflation in check over 2025.
Surge in number of flats listed for sale
One notable trend emerging during the early weeks of 2025 is a double-digit increase (14%) in the number of flats on the market, compared to a more modest increase (5%) in the number of houses for sale.
A return to price increases for flats in 2024 has brought more supply to the market, with flats accounting for 1 in 4 homes currently for sale.
This increase in the number of flats for sale is running well ahead of the growth in new sales agreed (4%) and buyer demand for this property type, which is currently 1% of all buyers.
In contrast, the demand for houses is 16% higher than a year ago, while available supply of this property type is just 5% higher.
This mismatch in supply and demand explains why the value of an average flat has risen by just 0.5% in the last year, compared to house values which have risen 2.2%. That said, we don’t expect house values to rise faster, given the greater choice of homes for sale and the extra stamp duty costs for many buyers.
In most cases, flat-owners coming to market are facing smaller capital gains than house-owners.
Two in every 5 flats for sale (40%) have an asking price of less than £20,000 above the last purchase price, compared to just 6% of houses.
Gains, even small, are not guaranteed though, with 15% of flats priced lower than they were previously purchased for.
Gap between price of houses and flats reaches 30-year high
The search for space over the pandemic boosted demand for houses, while concerns over the running costs of flats (e.g. service charges and ground rents) has acted as a drag on flat prices. Building safety is another factor impacting demand for some recently built flats.
The average price of a flat has increased by just 7% over the last 5 years, compared to house prices increasing by nearly a quarter (24%).
Looking at data from a longer period, the gap between the price of houses and flats is at a 30-year high. The average price of a house (£319,500) is 67% higher than the average price of a flat (£191,300).
Growing preference for houses a missed opportunity?
While flats are looking like better value for money, buyers (especially first-time buyers) are still prioritising houses.
Zoopla data shows that in 2017, over 2 in 5 (44%) first-time buyers who were looking to buy outside London wanted a 3-bed house. This increased to over a half (52%) by the end of 2024.
However, demand for 1 and 2-bed flats has declined from 25% to 17% over the same period.
It’s surprising that more buyers aren’t looking at flats as an option for home ownership, given the pricing differential to houses and the cost of buying vs renting.
Among major UK cities, we calculate that the monthly mortgage repayments on a flat are 43% lower than the cost of renting, while mortgage costs for a house are 22% higher.
The market for flats is diverse and, in an affordability-constrained market, it seems that there are opportunities for canny buyers prepared to do their homework and weigh up the purchase of a flat rather than potentially waiting longer to buy a house. The outlook for prices, future saleability and running costs are all important factors.
Housing market outlook for 2025
The housing market remains resilient with more people looking to move home in 2025 and 2026 than this time last year. Average earnings growth of 6% over the last year, well ahead of inflation, is supporting buyer confidence and helping to reset affordability.
There has been a sizable increase in the number of homes for sale in the early weeks of the year, which is giving buyers greater choice and stronger negotiating power.
Alongside higher stamp duty costs coming in for many from April, we expect house price inflation to be kept in check at 2-2.5%, with above-average growth in more affordable markets outside southern England.
House Price Index February 2025: country, region and city summary
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About our House Price Index
The Zoopla House Price Index (HPI) is a repeat sales-based price index, using sold prices, mortgage valuations and data for recently agreed sales. The index uses more input data than any other and is designed to accurately track the change in pricing for UK housing. It’s a revisionary index and non-seasonally adjusted.
The HPI for October 2024 uses the most recent full data available up to August 2024. We revise previous data where needed to ensure the most accurate representation of the market at any given time.