The latest house price data from e.surv and Acadata indicates a turning tide with a 0.1% increase in the average sale price of a home in England and Wales, a welcome change following four months of decline.

A combination of strong wage growth and strong first-time buyer demand due to Stamp Duty relief are thought to be the driving factors behind the change.

However, London and the South East continue to underperform, with affordability and mortgage rates preventing many from entering the market. It’s a more optimistic picture in the regions; the North is leading market recovery with the North East and North West both seeing average prices rise. Yorkshire and the Humber, the Midlands and Wales are also recovering well.

Rob Owens, head of research at e.surv, comments: “Our latest house price index reveals a nuanced picture of the housing market in England and Wales. In January 2025, the average sale price of a home rose by 0.1% to £352,300, ending a four-month decline. Despite this modest increase, average annual prices remain 3% lower than a year ago and nearly £25,000 below the peak of late 2022. 

“Our figures, including cash and mortgage transactions, provide a comprehensive market view. The continued drag from southern England, particularly London, significantly impacts our overall metrics. This drag is largely due to affordability constraints, with stretched affordability and higher mortgage rates making it difficult for buyers to enter the market. 

“However, there are signs of forward momentum. First-time buyer demand surged following the April Stamp Duty rise. With mortgage approvals increasing and the Bank of England’s recent base rate cut to 4.5%, we anticipate further market strengthening in the coming months. 

“Despite global economic turbulence, the underlying shortage of homes and strong wage growth continue to support the market in England and Wales. 

“This month, we have re-weighted our metrics to reflect the increased share of flats in the housing mix – nearly 18% in 2024. This adjustment has slightly depressed the average prices we report, though the impact on reported price changes is less marked.”