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Introduction

The UK housing market has experienced a slowdown in price growth following a period of strong increases in previous years. Although the average house price has risen to around £300,000, higher mortgage rates and borrowing costs have made affordability more challenging for many buyers.

Housing trends also vary across the country, with stronger price growth in regions such as Northern England, Scotland and Northern Ireland, while London and parts of Southern England have seen more subdued performance. Despite these pressures, the market has remained relatively stable, with expectations of gradual and moderate price growth as financial conditions improve.

This report analyses house price trends in England. The goal is to explore how house prices have changed over time and to use the Prophet forecasting model to predict future prices.

Data

Data Source

The dataset used in this report is taken from the UK House Price Index (UK HPI), published by HM Land Registry and the ONS. It contains monthly estimates of average residential property prices across regions in the UK.

hp<-read.csv("Average-prices-2025-09.csv")

Data Preparation

As the dataset contains several UK regions, the data was filtered to include only England. The variables were then renamed so that the date column is ds and the price column is y, as required by the Prophet Model.

uk_hp<-subset(hp,Region_Name=="England")
df<-data.frame(ds=uk_hp$Date,y=uk_hp$Average_Price)

Prophet Model

The Prophet model is used to model the time series and capture both the long term trend and seasonal patterns in house prices.The model then generated forecasts for future values.

m<-prophet(df)
## Disabling weekly seasonality. Run prophet with weekly.seasonality=TRUE to override this.
## Disabling daily seasonality. Run prophet with daily.seasonality=TRUE to override this.
future<-make_future_dataframe(m,periods=60)
forecast<-predict(m,future)

Analysis

Long Term Trend

The following plot shows the long term behaviour of house prices in England. It allows us to observe the overall trend in the data over time.

ggplot(df,aes(x=as.Date(ds),y=y,group=1))+geom_line()+scale_y_continuous(labels = label_dollar(prefix="£"))+labs(title="Average House Prices in England",x="Date",y="Average Price (£)")

The plot shows a clear upward trend in house prices in England over time, with particularly strong growth from the early 2000s onwards.

Seasonality

The Prophet allows us to visualise seasonal variation in the data. The following plots show the seasonal patterns identified by the model.

prophet_plot_components(m,forecast)

The plots show a strong long term increase in house prices, while the seasonal variation within each year appears relatively small compared to the overall trend.

Forecasting

The fitted Prophet model can now be used to generate forecasts for future house prices. The following plot shows the predicted values together with uncertainty intervals.

plot(m,forecast)

The forecast plot shows the predicted house prices (£) together with the uncertainty interval. This suggets that house prices are expected to continue increasing in the future, following the upward trend observed in the historical data.

Limitations

While the Prophet model provides a useful method for forecasting trends in house prices, it has its limitations.

Firstly, the model relies entirely on historical data and assumes that past patterns will persist into the future. This limits its reliability in periods of structural change, such as shifts in interest ratees, government policy or economic instability.

Secondly, Prophet focuses primarily on trend and seasonality and doesn’t explicitly incorporate external economic variables. As a result, it can’t account for key drivers of housing prices, therefore these forecasts should be interpreted as indicative projections rather than precise predictions of future market behaviour.

Conclusion

This report examined house price trends in England, using the Prophet time series model. The analysis indicates that house prices have shown persistent growth over time, with relatively small seasonal variation. The model forecasts that prices are likely to continue increasing in the coming years, reflecting the long term strength of the UK housing market.