UK house prices rose at their fastest pace in more than a year in June while rental growth eased slightly but remains close to record highs, according to the latest ONS figures.
The average UK house price hit £269,000 in June, up 3.7% on the year and stronger than the 2.7% growth recorded in May.
It’s the steepest annual rise since early 2023, with buyer confidence improving as expectations grow that mortgage rates will begin to fall later this year.
Scotland saw the strongest increase, with prices up 5.9% to £192,000. England followed with a 3.3% rise to £291,000, while Wales posted a smaller 2.6% increase to £210,000.
BUYER ACTIVITY
Agents say the data underlines the resilience of the market despite higher borrowing costs. Many are now seeing more activity from buyers who had been sitting on the sidelines, encouraged by signs that the rate cycle is turning.
On the rental side, average UK monthly rents reached £1,343 in July, up 5.9% on the year and slightly down from the 6.7% growth seen in June, suggesting affordability pressures may be starting to bite.
England recorded average rents of £1,398, up 6%, while Wales jumped 7.9% to £807 and Scotland rose 3.6% to £999.
In Northern Ireland, the average stood at £855 in May, up 7.4% on the year. Within England, the North East saw the sharpest rise at 8.9%, while Yorkshire & the Humber had the slowest at 3.5%.
With rents still rising faster than house prices in many areas, landlords and tenants alike remain under pressure.
INDUSTRY REACTION
Richard Donnell, Executive Director at Zoopla, says: “Improved access to mortgages is helping first-time buyers buy homes and easing the demand for rented homes alongside lower levels of migration.
“Rental growth is slowing and set to move lower over the rest of the year as affordability acts as a growing brake on rental growth. House prices inflation is volatile on the ONS measure but remains below the growth in average earnings which is helping to slowly improve affordability.”
DECISIVE ACTION
Maria Harris, Chair at Open Property Data Association, says: “These rising prices reflect the ongoing affordability pressures households are facing, particularly in regions where growth is most pronounced such as the North East.
“While increased values may benefit existing homeowners, first-time buyers and lower-income households are likely being squeezed out further amid constrained supply and persistent uncertainty over housing policy delivery.
“We urge policymakers and industry stakeholders to respond to these insights with decisive action; expanding housing supply through an easier homebuying and selling process, and to support consumers in their ability to confidently enter into a property transaction.
“Only with a more holistic, cohesive, and smart data-informed approach can we hope to stabilise housing outcomes across the UK.”
DOUBT OVER RATE CUTS
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “Another set of housing market data which confirms buyer and seller resilience as well as a determination to keep transactions alive and negotiate hard on price.
“That confidence has been supported by rising wages and easing affordability pressures, although not too much reliance should be placed on these numbers as they are a little dated but are the most comprehensive of all as include mortgaged and cash transactions.
“However, the looming, almost inevitable tax rises on the horizon and increasing concerns about higher-than-expected inflation are likely to limit the depth and frequency of future interest rate cuts, which would have given a further boost to activity.”
RESILIENT MARKET
Jason Tebb, President of OnTheMarket, says: “Although historic, the Land Registry data shows house values continued to rise on an annual basis in June, with the average property price £9,000 higher than a year ago, even though affordability continues to be a challenge and is keeping prices in check to an extent.
“The market continues to demonstrate resilience, assisted by five interest rate reductions in the past year.
“These cuts, with the suggestion of more to come, have boosted buyer and seller confidence, increasing activity in the market and benefiting the wider economy. However, with inflation rising again to 3.8% in July, its highest level in a year and a half, this may persuade the Bank to press the pause button for now with regard to further reductions.”
GROWING MOMENTUM
Iain McKenzie, Chief Executive of The Guild of Property Professionals, says: “The ONS data confirms the growing momentum in the market. The continued growth in annual house prices is a clear indicator that confidence is returning, and the market is moving into a phase of sustainable recovery.
“This isn’t a fleeting spike; it’s a recovery built on stabilising foundations. The key driver has been the continued improvement in mortgage rates. With some lenders now offering sub-4% deals and swap rates suggesting further falls are possible, buyers are benefiting from improved affordability.
“Crucially, when combined with strong earnings growth, the proportion of household income needed for mortgage payments is now almost back to its long-term average.
“This has been the missing piece of the puzzle, unlocking pent-up demand that has been waiting on the sidelines.
“Buyer demand and agreed sales are both up on last year.”
“The activity metrics back this up. Buyer demand and agreed sales are both up on last year, and with transaction volumes on track to hit 1.1 million in 2025, we are seeing a welcome return to pre-pandemic norms.
“However, we’re not getting carried away. The market is not uniform, as shown by Scotland’s impressive 5.9% growth, and buyers remain rightly price-sensitive. The broader economic picture, with modest GDP growth and persistent inflationary pressures, will ensure the market stays grounded.
“This, combined with more properties coming to market, will keep a lid on price growth and ensure the recovery remains stable.”
REALISTIC PRICING
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “We have been busier than expected in our offices, with strong agreed sales and very few fall-throughs. Realistic pricing from the outset is driving momentum, and well-presented homes – especially family houses in good school catchments – are attracting committed buyers.
“At the top end, stamp duty is a constant talking point; while the high cost is slowing some decisions, the desire for more space is still pushing people to commit. A bigger influence has been sellers looking to offload rental properties before buying to minimise their stamp duty bill, which will inevitably affect the lettings market.
“What’s surprised us most is the first-time buyer flat market – it slowed after the stamp duty holiday ended, but has now rebounded more strongly than we’ve seen in years. That said, there are still well-priced homes sitting unsold, often because buyers are holding back.
“If you’re waiting for prices to drop, you might be right – but the property you want could be withdrawn, nothing suitable may come up, or prices could rebound far faster than they fall. If you see something you like but aren’t sure on the price, call the agent to gauge the seller’s position before you view – far better than hesitating and watching someone else buy it.”
MORE HEADWAY
Nathan Emerson, Chief Executive of Propertymark, says: “House price growth is widely regarded as being an important factor in boosting overall economic progress, so it is reassuring to see yet more headway as the housing market continues to see momentum.
“Despite the impact that stamp duty hikes and domestic and global factors have had on the economy, there are still convincing reasons to be optimistic about the property market in general.
“Total housing construction output has grown recently, and the UK Government and the devolved administrations are keen to meet their ambitious housing targets.
“Additional new housing stock should provide people with extra choice in the longer term and help enable those who aspire to buy grasp their ambitions.”
UNHEALTHY SITUATION
“[As to rental prices,] with the UK Government and the Scottish Government edging towards the final stages of legislating the Renters’ Rights Bill and the Housing (Scotland) Bill respectively, the rental market is about to undergo fundamental changes aimed at strengthening consumer protection.
“We currently stand at a point where, on average, across the UK there are typically six people making an application for every rental property available. This represents an extremely unhealthy situation where long-term investment is urgently needed to keep pace with growing demand across nearly all regions.”
GROWING CONFIDENCE
Verona Frankish, Chief Executive of Yopa, says: “June’s figures reflect a market that is steadily building momentum, with both the rate of monthly and annual price growth improving against the backdrop of firmer buyer demand.
“At the same time, transaction levels have risen and mortgage approvals continue to climb, which points to growing confidence among both buyers and sellers and should help to further stimulate the market over the remainder of the year.
“A stronger annual rate of growth than expected demonstrates that the property market has shaken off recent uncertainty and this renewed stability provides reassurance for those looking to move, as well as a clear sign that the foundations for further price growth remain in place.”
ECONOMIC HEADWINDS
Marc von Grundherr, Director of Benham and Reeves, says: “The latest figures show that house prices not only advanced on a monthly basis in June but annual growth has also strengthened considerably compared to May.
“This highlights the underlying resilience of the UK property market, with buyers continuing to transact despite wider economic headwinds.
“In London, while annual growth remains more subdued, we are seeing steady month-on-month improvements that provide a solid foundation for recovery and this slow but steady momentum underlines the continued long-term strength of London property as a safe and stable investment.”
ACTIVE MARKET
Matt Thompson, head of sales at estate agency Chestertons, says: “Compared to summer of last year, we have seen a more active property market which has been driven by an influx of vendors putting their homes up for sale.
“This has given some house hunters a more varied selection of properties to choose from which inevitably led to more contracts being exchanged.
“In London, buyer demand has remained relatively strong which is resulting in stable or increasing property values in certain areas.
“Other parts of the capital such as prime central London, however, registered a slight price adjustment that has given more domestic buyers the opportunity to purchase a property in sought-after locations within their initial budget.”
