According to today’s UK House Price Index from HM Land Registry, UK average house prices rose 2.6% in the year to September 2025, but saw a monthly decrease of -0.6%. The average price of a property in the UK in September 2025 was valued at £272,000.

Stacy Eden, Head of Real Estate at RSM UK, comments: “Today’s UK House Price Index reveals a 2.6% annual rise in average house prices to £272,000 in September 2025, but shows a worrying monthly decrease of 0.6%.

The Royal Institution of Chartered Surveyors’ (RICS’) September 2025 UK Residential Market Survey reported that new buyer enquiries were in the negative territory for the third successive report although the Bank of England’s Money and Credit data reported that mortgage approvals for house purchases, an indicator of future borrowing, increased by 1,000 to 65,900 in September.

“The uncertainty from government around taxes on housing values possibly replacing Stamp Duty, and on landlords’ rental income, coupled with a mediocre economic outlook, political uncertainty, significant government debt and stubborn inflation, has all resulted in a much softer market than expected at the beginning of the year. Buyers don’t feel positive about the market and future economic growth and stability.

“The biggest change is seen in London, where house prices are the highest in the UK, and are therefore most affected by the government’s focus on taxing wealth through inheritance tax (IHT) and non-dom tax changes, as well as the threat of higher taxes on high valued homes. London experienced a 1.8% fall in house prices over the year to September 2025, and a 1.1% fall in the month to September 2025. Worryingly, there has also been a 3.6% monthly drop for cash buyers, which further highlights international concerns about the UK and penal rates of SDLT on high valued homes.

“The forecast for London for the next five years is about 15% price growth, compared to a UK average of 22%, with London prices now expected to be 33% above the UK average by 2030 (similar to 1998 to 2008), down from 70% above at the start of 2017.

“We’re hoping that the government recognises that residential development in London has virtually stopped, and will only be reversed if developments become viable again. The government has an opportunity to influence this in the upcoming budget, by continuing to streamline planning, reduce property taxes, and ensure the regulation around building safety does not lead to continued hold-ups in getting developments off the ground. There are also further concerns for landlords around rental inflation, now 5% and falling, increasing regulation around the Landlord and Tenant Act, and the threat of NI on rents.”

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