In England, the North East had the highest annual growth rate
The average UK property price is now £297,755, the lowest since June, according to the Halifax.
The lender says house prices fell by 0.6 per cent in the final month of 2025.
Annual growth, the lender added, slowed to +0.3 per cent, down from +0.6 per cent in November.
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Amanda Bryden, Head of Mortgages, Halifax, said: “Average house prices fell by -0.6% in December, down £1,789 compared to November, with a typical property now costing £297,755, the lowest since June 2025.
“On an annual basis, growth slowed to +0.3%, down from +0.6% in November.
“While this may feel like a subdued close to the housing market in 2025, overall activity levels were resilient over the last year and broadly in line with the pre-pandemic average.
“Various forces are poised to somewhat buoy the market heading into 2026.
“While December’s monthly fall in prices was likely related to uncertainty in the latter part of the year, this should now be starting to unwind.
In England, the North East had the highest annual growth rate, as property prices rose by +3.5 per cent, to £181,798.
This was followed by the North West, which saw growth of +2.8 per cent, to £245,323.
Property prices in London fell by -1.3 per cent over the course of 2025 to £539,086.
She added:”Further, mortgage rates are already reducing following the latest Base Rate cut and there are an increasing number of lending options available for those borrowing at a higher loan-to-value.
“While affordability pressures persist, the house price to income ratio was at its lowest in over a decade in December, striking a positive note for those looking to purchase their first home.
“On this basis, and recognising the headwinds that may affect buying power – such as the slowing of wage inflation and flattening employment rates – we expect a modest rise in house prices during the year of between 1% and 3%.”