UK house prices plummeted to their lowest level in six months during December, a new index has revealed.
Property values saw a 0.6 per cent, or £1,789, month-on-month decline, pushing the typical house price to its lowest point since June last year, according to Halifax.
Annual growth in property values also slowed to 0.3 per cent, down from 0.6 per cent in November.
Amanda Bryden, head of mortgages, Halifax, said: “Average house prices fell by 0.6% in December, down £1,789 compared to November, with a typical property now costing £297,755, the lowest since June 2025.”
The average UK house price in June 2025 was £297,157.
Ms Bryden added: “While this may feel like a subdued close to the housing market in 2025, overall activity levels were resilient over the last year and broadly in line with the pre-pandemic average.
“Various forces are poised to somewhat buoy the market heading into 2026. While December’s monthly fall in prices was likely related to uncertainty in the latter part of the year, this should now be starting to unwind.
“Further, mortgage rates are already reducing following the latest (Bank of England) base rate cut and there are an increasing number of lending options available for those borrowing at a higher loan-to-value.”
Ms Bryden said that “recognising the headwinds that may affect buying power, such as the slowing of wage inflation and flattening employment rates, we expect a modest rise in house prices during the year of between 1% and 3%.”
Northern Ireland continues to be the strongest-performing part of the UK for percentage house price growth, with a 7.5% annual rise, Halifax said.
By contrast, average house prices in London fell by 1.3% annually.
Karen Noye, a mortgage expert at wealth manager Quilter, said: “The end of the year often leaves the housing market short on urgency, and December was no exception.
“With many households having already mentally parked moving plans, the late timing of the budget added a further reason for buyers and sellers to pause, leaving activity limited as attention shifted towards the new year rather than pushing ahead before Christmas.
“Against that backdrop, Halifax’s figures showing prices falling by 0.6% over the month point to a market that was subdued rather than fundamentally weakening.”
In signs that pent-up demand is being released into the market, Rightmove reported this week that recorded its busiest Boxing Day for website visits in December 2025.
Rightmove said the most popular type of homes to be listed for sale on Boxing Day were smaller properties with two bedrooms or fewer, which are often targeted by first-time buyers.
New buyer and seller activity on Boxing Day in 2025 was busiest in the South East, east of England and London, according to the website.
Jeremy Leaf, a north London estate agent said: “Prices may have slipped a little while some caution remains but since returning after the break we have noticed in our offices how recent falls in interest rates and inflation have started to improve buyer and seller confidence.”
Amy Reynolds, head of sales at London-based estate agency Antony Roberts, said: “There are clear signs that the market is on a more positive footing. We’ve seen a genuine post-budget bounce, with improved buyer confidence and several sealed bids in December and already in January, something that was far less common last year.”
Iain McKenzie, chief executive of The Guild of Property Professionals, said: “With plenty of choice available, well-priced homes are attracting interest.”
Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “Overall, there is still a sense of consumer caution lingering within the marketplace, mostly in respect of wider economic considerations, such as the rate of inflation and how this directly impacts affordability for many.”
Here are average house prices and the annual change, according to Halifax. Regional annual change figures are based on the most recent three months of approved mortgage transaction data:
East Midlands, £246,470, 0.9%
Eastern England, £333,617, minus 0.8%
London, £539,086, minus 1.3%
North East, £181,798, 3.5%
North West, £245,323, 2.8%
Northern Ireland, £221,062, 7.5%
Scotland, £217,775, 3.9%
South East, £386,692, minus 0.9%
South West, £306,618, 0.1%
Wales, £230,233, 1.6%
West Midlands, £262,820, 1.4%
Yorkshire and the Humber, £218,204, 2.6%
