House Price Rise as Buyers Still Favour Houses over Flats

The UK housing market has shown resilience in 2025, with house prices steadily increasing. And amidst this data, we can note a distinct trend – buyers are increasingly favouring houses over flats.

The gap between house and flat prices has reached its widest point in 30 years, with the average house now costing 67% more than the typical flat. This shift in buyer preferences, coupled with rising salaries and an increased volume of homes for sale, has propelled the market forward.

House-Flat Price Gap

According to Zoopla, the divide between flat and house prices has reached its widest point in three decades. The average house now costs £319,500—67% more than the typical flat, which stands at £191,300.

The market remains strong across all major indicators, with demand fuelling transactions. The volume of new sales agreements is 10% higher than last year, and the inventory of homes for sale is 11% higher.

Buyer Confidence & Housing Affordability

Zoopla noted that more people are contemplating a move in 2025 and 2026 than at this point last year. He attributed this to the increase in salaries, which has risen 6% in the past year.

But, while houses remain the first choice for buyers, apartments present opportunities for those willing to look around.

House Prices Rising but Growth Slows

Despite more market activity, annual house price growth has slowed slightly, at 1.9% in January 2025 compared to 2% in December 2024.

Higher mortgage rates — 0.5% more since September 2024 — and the upcoming stamp duty changes in April are key factors limiting price increases. These increased expenses would add approximately £2,500 to the purchase, and buyers would be inclined to negotiate for lower prices.

Market Reactions & Outlook

Property industry commentators have noted these trends. Demand is catching up with supply and exerting downward pressure on house prices. Sellers are motivated by the upcoming stamp duty deadline, recent political uncertainty, and rising mortgage rates, but buyers are waiting because of ongoing economic concerns.

Many buyers are attempting to complete purchases before April's stamp duty change in order to save an estimated £2,500.

Conclusion

Looking ahead, house prices are expected to continue their upward trajectory, but growth will likely remain tempered by economic factors such as inflation, interest rates and ongoing affordability challenges.

As the market adapts to changing buyer preferences, developers will need to keep up with the demand for homes, ensuring that new builds align with shifting trends. The outlook for 2025 suggests a steady, albeit cautious, property market.