UK house prices fell in December compared to November, slowing the rate of annual growth to the lowest in over a year and a half, according to data from Nationwide.
Prices fell 0.4% month-on-month as 2025 came to an end with the average house in the UK costing £271,068, down from just under £273,000 in November.
This meant year-on-year growth slowed from 1.8% in November to 0.6% in December, which is the slowest annual growth recorded by the building society since April 2024.
A high base for comparison from December 2024 is part of the reason, said Nationwide's chief economist, Robert Gardner. as annual price growth was a solid 4.7% the previous year.
"Despite the softer end to the year, the word that best describes the housing market in 2025 overall is ‘resilient’," Gardner felt.
"Even though consumer sentiment was relatively subdued, with households reluctant to spend and mortgage rates around three times their post pandemic lows, mortgage approvals remained near pre-Covid levels."
With the end of a stamp duty holiday taking effect at the beginning of April, this created volatility through the spring and summer, he pointed out, as activity spiked in March when purchasers brought forward transactions to avoid paying additional tax, which led to a softer market in the following months.
"However, the underlying picture was little changed as demand held up well throughout [the year]," he said.
"With price growth well below the rate of earnings growth and a steady decline in mortgage rates, affordability constraints eased somewhat, helping to underpin buyer demand."
House purchases by first-time buyers were above the long-term average, Gardner noted, which he said was supported by easier mortgage availability.
The share of homes sold with a high loan-to-value (deposits of 15% or less) reached the highest level for over a decade.
Regionally, East Anglia was the only region to experience house price decline in the fourth quarter of the year, with the lowest growth being seen in the South East, South West and London.
Average house price growth across southern England was 0.6%.
Annual price growth in London remained subdued over the whole year, with prices rising by 0.7% in 2025, down from 2.0% in 2024.