House prices in May 2025 were 2.5% higher than the same month a year earlier.
If you’re keeping an eye on the property market, the latest update from Halifax gives a clear picture of where things stand. Prices have dipped slightly this month, but the general trend continues to show stability.
Let’s break it down simply so you can understand what’s going on and what it might mean for your home plans.
House Prices: Slight Drop, But Nothing to Panic About
In May 2025, the average house price fell by 0.4%. That’s a drop of about £1,150, bringing the typical property value to £296,648. This compares to £297,798 last month.
While a small monthly fall like this can sound worrying at first, it’s worth keeping things in perspective. Since the beginning of the year, prices have only fallen by 0.2% overall. That’s hardly dramatic and shows that, despite a few ups and downs, the market is holding firm.
Key figures from May’s Halifax House Price Index:
- Average house price: £296,648
- Monthly change: -0.4%
- Quarterly change: -0.3%
- Annual change: +2.5%
So, although prices dropped slightly in May, homes are still worth around £7,000 more than they were this time last year.
What’s Behind the Numbers?
According to Halifax, the recent changes are likely due to the market adjusting after a busy spring period. There was a brief boost in activity earlier in the year, partly thanks to stamp duty changes. Now things have settled again.
A few things are helping to keep the housing market balanced:
- Mortgage rates have come down a bit compared to last year.
- Wages are growing steadily, which helps people afford homes.
- Despite high property prices, buyer confidence remains relatively strong.
However, many buyers still find affordability a challenge. Property prices are still high compared to income, so stretching for a deposit or monthly payments remains tough for some.
Regional Differences: Some Areas Still Growing Strongly
While overall prices dipped in May, not every area is behaving the same. In fact, some parts of the country are seeing house values continue to rise faster than others.
Here’s how different areas are performing:
Top growth regions:
- Northern Ireland:
- House prices up 8.6% year-on-year
- Average property now costs £209,388
- Wales:
- Annual price growth of 4.8%
- Average home now £230,405
- Scotland:
- Also up 4.8% over the past year
- Average property price at £214,864
In England:
- North West & Yorkshire and the Humber:
- Both up 3.7%
- Average prices:
- North West: £240,823
- Yorkshire & Humber: £213,983
At the other end of the scale, London saw a much smaller annual rise of 1.2%. But it remains the most expensive part of the country, with the average home now priced at £542,017.
Housing Market Activity: Fewer Transactions and Approvals
While prices have mostly held steady, the number of homes being bought and sold has taken a dip:
- Property transactions in April 2025 were down sharply compared to March
- Around 64,680 homes changed hands (seasonally adjusted), a drop of 63.5%
- Mortgage approvals also fell in April
- Down 4.9% compared to March
- Around 60,463 new mortgages were approved
Survey data from estate agents also points to a quieter market, with fewer people making offers and fewer sales being agreed.
This drop in activity doesn’t mean confidence is disappearing – it’s more likely due to buyers waiting to see if interest rates might fall later this year.
What Might Happen Next?
Looking ahead, the path of house prices will depend on a few key things:
- Interest rates: If they come down, borrowing will be cheaper, which could encourage more buyers.
- Income growth: Higher wages will help more people afford a mortgage.
- Inflation trends: If the cost of living remains high, it may continue to hold some buyers back.
Despite these uncertainties, Halifax says the market has shown resilience so far and expects that to continue for the rest of the year.
What This Means for You
If you’re thinking about buying, selling, or remortgaging, you might be wondering what to do next. The truth is, there’s no perfect time – but having the right advice makes all the difference.
Here’s what we’d suggest:
First-time buyers:
The small drop in prices may work in your favour. If rates stay steady, this could be a good time to explore your options.
Home movers:
Stability means less risk of big price swings while you’re in the middle of a sale and purchase.
Remortgaging?
Lower mortgage rates compared to last year might mean it’s time to review your deal.
Looking to invest?
Some regions are still seeing strong price growth. If you’re considering buy-to-let, areas like Northern Ireland or the North West could be worth a look.
How Kerr & Watson Can Help
At Kerr & Watson, we offer tailored advice to help you navigate the mortgage and protection market, no matter what stage you’re at.
Whether you’re a first-time buyer, moving home, or looking to remortgage, we’ll guide you through your options clearly and confidently – without any jargon or pressure.
If you’ve got questions about what the latest house price changes mean for you, get in touch. We’re here to help you understand your next steps and make smart, informed decisions.
The full report for more insights on the current state of the UK housing market: Halifax Price Index May 2025
Source: Halifax
