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House price growth softened at the start of 2025, according to an index.
The annual rate of house price growth slowed to 4.1% in January, from 4.7% in December, Nationwide Building Society said.
Across the UK, house prices increased by 0.1% month-on-month, which was lower than a 0.7% rise recorded in December.
The average UK house price in January is £268,213.
Robert Gardner, Nationwide’s chief economist, said: “The housing market continues to show resilience despite ongoing affordability pressures.”
He continued: “House prices remain high relative to average earnings, with the first-time buyer house price to earnings ratio standing at 5.0 at the end of 2024, still well above the long run average of 3.9.
“Consequently, the deposit hurdle remains high. This is a challenge that has been made worse by the record increase in rents in recent years, which, together with the cost-of-living crisis more generally, has hampered the ability of many in the private rented sector to save.
“Therefore, it’s not surprising that a significant proportion of first-time buyers have to draw on help from friends and family to raise a deposit.
“In 2023/24, around 40% of first-time buyers had some assistance raising a deposit, either in the form of a gift or loan from family or friends, or through an inheritance.
“Despite these challenges, there has been relatively little change in overall levels of home ownership in recent years. The latest English Housing Survey produced by the Ministry of Housing, Communities and Local Government (MHCLG) showed home ownership rate remained stable in 2024 at 65%.”
But he said home ownership rates among younger age groups, in particular those aged 25 to 34 and 35 to 44, remain well below their 2004 peaks.
Sarah Coles, head of personal finance, Hargreaves Lansdown said: “Prices are still under pressure from buyers trying to clamber through the stamp duty holiday window, before it slams shut at the end of March.”
Iain McKenzie, chief executive of the Guild of Property Professionals, said: “Momentum built up towards the end of last year has carried over into 2025, with market activity bolstered by a rush to complete transactions ahead of the impending stamp duty changes in April.”
Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “Currently, it’s likely a lot of movement in the market is due to people wanting to push through with their purchases and sales before the stamp duty rises in England and Northern Ireland in April.”
From April 1, the “nil rate” stamp duty band for first-time buyers in England and Northern Ireland will reduce from £425,000 to £300,000.