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The UK housing market continued to show significant regional variations in 2025, with London maintaining its position as the most expensive city for homebuyers. The average house price in the capital stood at ** British pounds in November, double the national average. However, the market dynamics are shifting, with London experiencing a *** percent annual decrease, while other cities like Liverpool, Glasgow, and Belfast saw more substantial growth of over **** percent respectively.

Affordability challenges and market slowdown

Despite the continued price growth in many cities, the UK housing market is facing headwinds. The affordability of mortgage repayments has been the biggest barrier to property purchases, with the majority of the respondents in a survey citing it as their main challenge until recently. A rising share of Brits reported affordability as a challenge between 2021 and 2023, reflecting the impact of rising house prices and higher mortgage rates. The market slowdown is evident in the declining housing transaction volumes, which have plummeted since 2021.

European context

The stark price differences are mirrored in the broader European context. While London boasts some of the highest property prices among European cities, a comparison of the average transaction price for new homes in different European countries shows a different picture. In 2023, the highest prices were found in Austria, Germany, and France.