Average House Prices in UK Fall in February 2025

Halifax has released its latest Property Prices Index today for February 2025.  Average UK house prices are up on the year at 2.9% pa but, it is no surprise that property prices have just started to fall, January to February prices were down but only just given:

Interest Rates Being Held or Going Up?

Given fears for a global recession, interest rates staying the same or even rising due to inflation increases and possibly climbing even higher on Trump Tariffs and a trade war.

Stamp Duty Threshold Reductions

Stamp Duty Land Tax (SDLT) thresholds are lowering back to historic levels starting on 1^st April at:

• £125,000 rather than £250,000 for all purchases when you’ve bought a home before i.e., this excludes first-time buyers.

First time buyer stamp duty thresholds are also being lowered and will pay :

• 0% up to £300,000 (currently £425,000).
• 5% SDLT on the portion from £300,001 to £500,00 (currently £425,001 to £625,000).
• If the price is over £500,000 (previously £625,000), you cannot claim the first-time buyer relief and must use the rules for people who’ve bought a home before.

Latest Average Property Prices February 2025

• Monthly Fall: Average UK Property Price £298,692 (it was £298,815 in January), so a fall on just 0.1%.

That said, annual property prices for the year are up as the rush to beat the stamp duty increase deadline on 1^st April reaches its final phase.

• Northern Ireland up 5.9% pa. with an average of £205,784
• Scotland up 3..8% pa with an average of £213,014.
• Wales up 2.08% pa with an average of £226,811.
• In England, average annual prices were also up:
  • Yorkshire and Humberside up 4.1% pa with an average of £216,1430.
  • London (the most expensive UK area) up 2.6% with an average of £545,183.

Comment

This will not be the last fall in property prices.  As mentioned earlier, geopolitical risk, stamp duty increases, interest rates held or increasing and likely tax increases in the Spring Statement on 26^th March will also push prices lower.  That said, we can then also see a mortgage rate ‘war’ as lenders battle to attract a contracting mortgage market.