The average price of a residential property rose 5.4% to £268,000 over the 12-month period, up from a 4.8% increase in the year to January.
According to the ONS data, house prices in England hit an average of £292,000 in February, up 5.3% compared to the corresponding month last year, while annual growth was higher than the 4.5% recorded in January.
In Scotland, the average home was worth £186,000, up 5.7% year-on-year, while Wales recorded slower growth, with average prices up 4.1% to £207,000.
Northern Ireland data, recorded quarterly, showed property prices increase 9% year-on-year in Q4 2024, bringing the average to £183,000.
Among England’s regions, the North West had the highest annual inflation, at 8% in February — up from 6.9% in January. London saw the slowest growth, with prices up 1.7%, down marginally from the 2% recorded in January.
Industry reactions:
Simon Gerrard, chairman of Martyn Gerrard, said: “This rise in house prices follows a particularly active first quarter, as buyers raced to beat the stamp duty deadline. With property prices continuing to rise well above affordable levels – particularly in parts of London, where the average first home now costs more than ten times the average salary – the recent stamp duty changes will only exacerbate the crisis for first-time buyers, who will now find it nigh on impossible to get their foot on the property ladder.
“If the government is serious about supporting first-time buyers, abolishing Stamp Duty for this group altogether would be a good place to start, or changing the regime so that sellers pay it instead. Without meaningful action, we risk going around in circles – observing the same structural issues play out in the market month after month.
“With global economic uncertainty still dominating the backdrop, the Bank of England’s next move on interest rates will be critical. A cut might ease the pressure on mortgage rates, offering some relief for buyers – but it’s far from a silver bullet.”
Jonathan Handford, MD at Fine & Country, commented: “March brought more economic signals that could shape the market ahead. The Bank of England held the base rate steady at 4.5%, while reports today reveal inflation dipped unexpectedly again to 2.6% — closer to the government’s 2% target — offering some relief amid ongoing cost-of-living pressures.
“Looking ahead, global headwinds such as the latest US tariffs under Trump’s proposed trade plans could add strain to the broader economy. However, this could prompt the Bank of England to consider further rate cuts to keep growth on track.
“In the near-term, while the February price bump may prove short-lived, there are signs of cautious optimism. A softer inflation outlook and potential rate reductions could support borrowing conditions — but affordability remains a hurdle, especially for those now facing a tighter stamp duty regime.”
Verona Frankish, CEO of Yopa, said: “Whilst house prices remained unchanged in February, we’ve continued to see positive growth on an annual basis and this is a far better measure of the ongoing improvements seen to the health of the UK property market.
“We also saw the Bank of England implement a second base rate reduction in February and so it’s only a matter of time before this boost to buyer market sentiment starts to accelerate the level of house price growth being seen across the market.”
Nick Leeming, chairman of Jackson-Stops, remarked: “We saw steady house price growth in the early months of 2025, driven by increased buyer activity ahead of the Stamp Duty Land Tax changes in April.
“Global economic uncertainty is also playing a role, with more U.S. buyers turning to the UK for stability — particularly in markets like the Cotswolds, where we’re already seeing upward pressure on prices. While market volatility doesn’t directly determine sales, it does influence a buyer’s drive to purchase.
“Across the Jackson-Stops network, completions jumped in February and instructions rose 16% year-on-year — a clear sign of a strong pipeline as we head into the Spring bounce.
“With sub-5% mortgage rates still available, many buyers are feeling motivated to act. To support continued momentum in the market, it’s vital the government delivers on its pledge to build 1.5 million homes by 2029.”
Nathan Emerson, CEO of Propertymark, added: “Housing is one of the most fundamental elements that can help drive overall economic progress, so it is welcome news to witness further house price growth year-on-year as we progress into 2025, especially at a time when there is a growing concern as to how international policies may impact the wider UK economy moving forwards. However, there are wider reports suggesting reduced mortgage rates could be a realistic outcome from recent events.
“It remains positive to see people approach the buying and selling process with a strong degree of confidence, despite inflation not being below the Bank of England target level of 2 per cent quite yet. We have seen an upbeat start to the year, and we remain optimistic this will continue into the traditionally busy spring and summer months.”
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