Annual house price growth fell to 2.9% in February 2025, after stalling by 0.1% on a monthly basis, Halifax’s House Price Index has revealed.
The average cost of property now stands at £298,600.
Tom Bill, head of UK residential research at Knight Frank, said: “Despite a rush to complete ahead of the stamp duty increase in April, supply outpaced demand in the first two months of this year, which kept downwards pressure on house prices.
“That pressure will be sustained if more inflation creeps into the UK economy through measures such as raising employer national insurance contributions.
“We were also reminded this week of how global politics can act as a brake on the market when Germany announced a defence spending increase, which pushed up borrowing costs in Europe. We expect low single-digit house price growth this year but the outlook is changeable.”
Northern Ireland has the strongest house price growth in the UK, with a yearly increase of 5.9%.
Scotland also seems to be picking up steam, as the annual growth rate increased from 2.5% in January to 3.8% in February.
Tomer Aboody, director of specialist lender MT Finance, says: “With a largely stable housing market, and indeed slight growth in evidence, we are seeing the reaction from buyers who are being cautious due to the uncertainty around inflation, but are looking to push ahead as mortgage rates are lower than they have been.
“As stamp duty changes are upon us, many buyers and sellers are either trying to scramble to complete transactions or are waiting tentatively to see if the Bank of England reacts with further rate cuts, which have been discussed.”