What's happening with house prices? Halifax says bigger homes are driving house price growth
Demand for larger homes has driven growth in UK property prices over the past year, according to new research by Halifax.
As easing interest rates improved mortgage affordability, annual property price growth reached +3.7% in January 2025, up from just 1.0% at the start of 2024. In cash terms, Halifax says prices increased by £10,431, with the average cost now at £294,818, surpassing the previous peak in August 2022 during the pandemic-era property boom.
The analysis – based on data from the Halifax House Price Index – reveals significant variations in price growth across different property types and regions. Terraced houses lead the way with annual growth of +4.5%, reaching £235,296, while detached properties increased by +4.1% to £471,748.
In contrast, flats saw the slowest growth at +3.2%, with an average price of £168,569. Semi-detached houses rose by +3.8%, averaging £307,685.
Aaron Strutt, product director at Trinity Financial, says: "With house prices still rising, many need more generous income multiples to secure a sufficiently large mortgage to purchase the property they want. Borrowing between four and five times single or joint income is normally possible, while some lenders offer up to six times the salary.
"Banks and building societies are keen to issue mortgages, and they do not mind if they lend against a house or flat. To access the most competitively priced mortgage rates, borrowers need a 35% or 40% deposit, although there are now much more competitively priced fixes for those with a 15% or 20% deposit."
Flats
Price growth for flats fluctuated significantly over the last year, from 1.3% in January 2024 to a peak of +4.7% in October, before easing to +3.2% at the start of 2025.
Despite this, the average price of £168,569 remains just £1,824 below the peak recorded in August 2022.
Regionally, the North East saw the strongest growth in flat prices, rising by +15.1% (£13,141) to £100,123, while the East Midlands experienced a slight decrease of -0.6% (-£705).
Terraced houses
Terraced homes led house price growth for much of the last year, peaking at +5.7% in October 2024. They began 2025 at +4.5%, with the average price now at £235,296, up by £10,025 over the last year.
The North East saw the highest annual increase for terraced houses at +8.4% (£10,263), while Yorkshire and Humberside had the slowest growth at +2.7%. As with flats, the North East has seen prices for terraced houses rise the most on an annual basis, up by +8.4% (£10,263).
Semi-detached houses
Semi-detached houses recorded growth of +3.8% over the last year, increasing by £11,367 in cash terms, with the average price now at £307,685.
Northern Ireland saw the biggest increase at +7.0% (£11,835), while Scotland had the slowest growth at +0.7%.
Detached houses
At the top end of the size scale, detached houses saw annual growth of +4.1% (£18,704). The average price of £471,748 is above the pandemic-era peak set in September 2022 (£471,333) and just shy of the new high set in September last year (£472,984).
Call Trinity Financial on 020 7016 0790 to secure a mortgage, book a consultation, or complete our mortgage questionnaire.
The information contained within was correct at the time of publication but is subject to change.
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