The annual rate of house price growth in the UK slowed to 4.1% in January, compared with 4.7% in December, according to the latest House Price Index from Nationwide. The bank added that there has been little change in the overall rate of home ownership in the UK in recent years despite recent affordability pressures.

Commenting on the figures, Robert Gardner, Nationwide’s chief economist, says: “The price of a typical UK home rose by 4.1% year on year in January, a modest slowing in the annual pace of growth compared with December. House prices increased by 0.1% month on month, after taking account of seasonal effects.”

However, the non-seasonally adjusted house price showed that house prices are declining, falling from £269,426 in December 2024 to £268,213 in January 2025.

Monthly mortgage payments are still 20% above the long-term average
Regarding housing affordability, Gardner comments: “As we highlighted in our recent affordability report, while there has been a modest improvement over the last year, affordability remains stretched by historic standards. A prospective buyer earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 36% of their take-home pay – well above the long-run average of 30%.