UK house prices, as measured by the UK House Price Index (HPI), increased by 2.5% between November 2024 and November 2025, reflecting modest growth in the residential property market, according to the latest government data. On a seasonally adjusted basis, average house prices rose by 0.6% between October and November 2025.
Northern Ireland and Scotland lead UK price growth, while London lags
House price movements varied significantly across the UK’s countries and regions over the year. Northern Ireland, the North East of England, and Scotland recorded the fastest price growth, although Northern Ireland figures cover the year to Q3 2025. In contrast, London saw a decline in house prices, continuing a trend of price moderation in the capital.
This regional divergence highlights the ongoing shift in demand towards areas outside London, a trend fuelled by lifestyle changes, remote working, and affordability pressures in the capital.
Mortgage approvals dip as UK house price growth slows in 2025
Data from the Bank of England indicates that mortgage approvals, a leading indicator of house sales, remain below pre-pandemic levels. Approvals reached a lockdown-related record low in May 2020, surged towards the end of that year, but have since fallen.
In November 2025, there were 64,530 mortgage approvals for house purchases, down 2% from the previous year and 1% from October 2025. By comparison, November 2024 recorded 65,938 approvals, signalling a slowdown in market activity.
Housing starts recover post-Covid but completions fall amid new regulations
The UK housing supply has experienced fluctuations since the Covid-19 pandemic. Housing starts and completions fell sharply during lockdown but gradually recovered in subsequent quarters.
- In England, there were 29,490 house building starts (seasonally adjusted) in Q2 2025, marking a 2% increase compared with the previous quarter and 16% year-on-year growth.
- Q3 2025 saw 29,620 starts, unchanged from the previous quarter but up 3% compared with Q3 2024.
- House building completions in Q3 2025 totalled 33,020, a 7% decrease from the previous quarter and 9% lower than the same period in 2024.
The housing market saw a peak of 68,100 starts in Q2 2023, largely due to builders advancing projects to avoid new regulatory standards introduced on 15 June 2023, which include enhanced energy performance requirements and electric vehicle charging provisions. This regulatory shift contributed to lower starts in subsequent quarters.
Sources: UK House Price Index, Bank of England, Office for National Statistics.
Contains Parliamentary information licensed under the Open Parliament Licence v3.0.
Outlook for luxury property investors
For investors in the luxury residential sector, these trends suggest opportunities outside London and in regions with higher growth momentum, while the overall slowdown in mortgage approvals signals a cautious market outlook. Monitoring regional supply-demand dynamics and regulatory impacts will be crucial for identifying profitable investments in the coming year.
