UK House Prices Return to Growth Amid Broad Market Stability
After a summer lull, the UK property market is showing signs of renewed growth. According to Nationwide Building Society, house prices rose by 0.5% in September 2025, recovering from a 0.1% decline in August, lifting the average UK property price to £271,995. The annual rate of house price growth also ticked up slightly, from 2.1% to 2.2%, indicating a gradual recovery after a period of stagnation.
Robert Gardner, chief economist at Nationwide, described the market as exhibiting “broad stability”, supported by low unemployment, rising earnings, and strong household balance sheets. According to Bank of England data, mortgage approvals for first-time buyers have remained steady at around 65,000 per month, close to pre-pandemic levels.
Regional Variations in House Price Growth
While overall prices are increasing, growth is uneven across the UK:
London: Average house prices nudged up 0.6% in Q3 2025, reaching £527,694
Southern England (outer areas): Prices largely stagnant, reflecting a soft landing in these regions
Northern England: Average prices in the North East and North West remain affordable at £138,500 and £166,000, respectively, offering opportunities for first-time buyers and investors
East of England: £317,000 on average, highlighting higher-cost regional markets
Experts note that while prices have returned to growth, the market remains in soft landing territory, with affordability pressures still influencing buyer behaviour.
Factors Driving Market Stability
Several factors are contributing to steady but cautious growth:
Interest rates on hold: According to the Bank of England, the base rate remains at 4%, after five cuts since last summer, providing stability for mortgage costs.
Strong earnings growth: Wage increases continue to support buyers’ purchasing power.
Household balance sheets: Low unemployment and manageable debt levels keep buyers in a relatively secure financial position.
Budget uncertainty: Approximately 30% of potential buyers report delaying purchases due to uncertainty over tax changes, including possible revisions to stamp duty or council tax, according to property market analysts.
Rental and Investment Insights
Even as house price growth remains modest, regional disparities create opportunities for investors:
According to recent market reports, rental yields in Northern England remain around 6–7%, while London averages closer to 3–4%
Areas with higher yields and lower property prices continue to attract buy-to-let investors seeking sustainable returns
First-time buyers can also benefit by targeting more affordable regions, such as the North East or North West, where deposits and monthly mortgage payments are more manageable
What This Means for Buyers and Investors
According to Nationwide, the combination of steady prices, affordability pressures, and regional variation means:
First-time buyers should act strategically, targeting regions with slower price growth and higher affordability
Property investors can find opportunities in areas with strong rental yields despite overall market stability
Buyers using high LTV mortgages must carefully consider affordability and deposit strategies in case rates shift
Tools like the First-Time Buyer Calculator and Buy-to-Let Calculator can help prospective homeowners and investors model costs, returns, and affordability based on regional differences and mortgage scenarios.
Final Thoughts
The UK housing market’s return to growth reflects broad stability, but regional variations and budget uncertainty continue to influence buyer confidence. Planning strategically, understanding local market conditions, and using data-led tools can help buyers and investors make informed decisions in this evolving market.
Use our First-Time Buyer Calculator or Buy-to-Let Calculator to model your next move with confidence, whether you are stepping onto the property ladder or expanding your investment portfolio.