That represented a decline of 0.6% from November, Halifax’s latest house price index showed, with the average cost of a home at its lowest since June

The average price of a home in the UK dropped £1,789 in December compared with the previous month, with a typical property costing £297,755, according to data from Halifax.

That represented a decline of 0.6% from November, Halifax’s latest house price index showed, with the average cost of a home at its lowest since June.

On an annual basis, house prices rose by 0.3% in December compared with a year ago, though this was slower than the 0.6% growth recorded in November.

Amanda Bryden, head of mortgages at Halifax, said: While this may feel like a subdued close to the housing market in 2025, overall activity levels were resilient over the last year and broadly in line with the pre-pandemic average.

Northern Ireland continued to see the strongest growth in the UK, with prices rising 7.5% over the past year, with a typical home now costing £221,062.

In Scotland, house prices rose by 3.9% on an annual basis in December, to an average of £217,775. Property values in Wales grew by 1.6% year-on-year in December, with the average home now costing £230,233.

In England, the north-east saw the highest annual growth rate of 3.5% in December, pushing the average house price up to £181,798. In London, property prices dropped by 1.3% over the course of 2025 to £539,086.

Looking ahead, Bryden said that various forces are poised to somewhat buoy the market heading into 2026. While December’s monthly fall in prices was likely related to uncertainty in the latter part of the year, this should now be starting to unwind.

Bryden said that mortgage rates were already reducing following the Bank of England’s (BoE) latest interest rate cut. The central bank lowered interest rates to 3.75% from 4% in December, taking borrowing costs to their lowest level in almost three years. She added that there are an increasing number of lending options available for those borrowing at a higher loan-to-value.

While affordability pressures persist, the house price to income ratio was at its lowest in over a decade in December, striking a positive note for those looking to purchase their first home, she said.