Average UK house prices rose by 2.8% in the year to July 2025, reaching £270,000, according to the latest official data, though the pace of growth eased from 3.6% in June. On a monthly basis, prices inched up by 0.3%.
Across the nations, average prices increased to £292,000 in England (up 2.7%), £209,000 in Wales (2.0%) and £192,000 in Scotland (3.3%).
The figures from the Office for National Statistics suggest the housing market is holding steady, but with growth constrained by mortgage costs and affordability pressures.
The ONS also reported that private rents across the UK rose by 5.7% in the year to August 2025, taking the average monthly rent to £1,348. Annual rental inflation eased slightly from 5.9% in July, but remains near record highs.
RISING RENTS
Rents increased to £1,403 in England (up 5.8%), £811 in Wales (7.8%) and £1,002 in Scotland (3.5%). In Northern Ireland, the average monthly rent climbed to £860, a 7.2% rise in the year to June. Within England, the North East recorded the strongest rental inflation at 9.2%, while Yorkshire and the Humber saw the lowest at 3.4%.
BIG IMPLICATIONS
Richard Donnell, Executive Director at Zoopla, says: “Rents and house prices are slowing across the UK as housing demand cools and affordability pressures bite on what people can pay for rent and mortgages.
“This has big implications for home building where weaker demand is holding back investment in growing supply. The government needs to either support demand or remove the impediments to getting more home built.”
HIGH SUPPLY, WEAK DEMAND
Tom Bill, Head of UK Residential Research at Knight Frank, says: “Price growth is being pushed lower by higher supply and weaker demand.
“Supply has been boosted an overhang of property since April’s stamp duty cliff edge and the fact more landlords are selling due to the Renters Rights Bill.
“Stable mortgage rates have supported demand but a general mood of economic uncertainty, which will become more intense as November’s Budget approaches, has made some buyers think twice and we have revised down our UK forecast this year to 1% from 3.5%.”
RENTERS’ RIGHTS BILL
And he adds: “Rental values are coming down from the highs of the pandemic but are still elevated by historical standards. More landlords are exploring a sale due to changes including the looming Renters Rights Bill, which should push rents higher by reducing supply.
“Landlords have been the subject of a succession of tax and legal changes in recent years so it’s not difficult to imagine how they felt about the recent speculation the government could charge National Insurance on rental income.
“For some it could be a disincentive too far, while others could pass the cost on in other ways. Either way, it could end up hurting tenants.”
STEADY AND SUSTAINABLE
Iain McKenzie, Chief Executive of The Guild of Property Professionals, says: “The figures show that the housing market continues to demonstrate resilience, with average prices rising by 2.8% in the year to July.
“While this represents a slowdown from June’s growth, the combination of steady demand, improved mortgage approvals, and a rise in available stock has underpinned activity through the summer.
“For buyers and sellers alike, the message is clear: well-priced homes are attracting attention, while those that overshoot tend to linger.
“With the window to complete before Christmas now narrowing, realistic pricing and proactive decision-making are more important than ever.
“Looking ahead, the Autumn Budget will be a key moment for sentiment, but the fundamentals suggest that the market will continue to move forward in a steady, sustainable way.”
MUTED PERFORMANCE
Marc von Grundherr, Director of Benham and Reeves, says: “The latest house price figures show that the market has continued to move forward, with uplifts in both monthly and annual growth demonstrating that there remains a good appetite for homeownership – even if it isn’t as insatiable as we’ve seen in previous years.
“Whilst the London market continues to trail many other regions, it’s important to remember that even marginal percentage increases in the capital translate into far greater sums on the table for sellers.
“So whilst a more muted performance may come as cause for concern for the capital’s home sellers, this continued growth underlines London’s status as the nation’s most resilient property market.”
MORE CAUTIOUS
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Over the past few weeks, buyers and sellers have become more cautious, not helped by continuing high inflation and mortgage rates not falling as quickly as anticipated until some clear direction is received from Government as to Budget policy.
“We may not know until the end of November so until then nervousness is likely to prevail with buyers, particularly those not dependent on the sale of another property or requiring little or no finance, holding sway.”
BUDGET CONCERNS
Verona Frankish, Chief Executive of Yopa, says: “The market has continued to improve in July, with both monthly and annual rate of house price growth strengthening.
“This slow but steady performance has been a consistent theme throughout the year so far and there’s little to suggest that this will change.
“That said, with the Autumn Budget on the horizon, we may see a momentary dip as the nation’s homebuyers hold off in the hope of a stamp duty shake-up.
“Whether such a reprieve will come to fruition remains to be seen, but either way, we could well see a spike in market activity following the Autumn Budget as the market gathers pace ahead of the Christmas break.”
CONSUMERS ARE FOCUSSED
Nathan Emerson, Chief Executive of Propertymark, says: “There continues to be two factors that may weigh heavily on consumers’ minds as they decide on what to do next regarding potentially approaching the buying and selling process.
“Any decision that the Bank of England makes today regarding base rates will determine whether people can realistically afford to relocate, and the uncertainty about potential further stamp duty restructuring may impact those moving house in England and Northern Ireland.
“Though we have clarification that the Budget will take place on 26 November 2025, this may cause people to delay their next house move in the meantime.
“For some, however, these factors will not impact their decisions due to the importance and urgency of their home move and may be able to more easily absorb any additional financial constraints to facilitate a home move.”
AFFORDABILITY ISSUES
Jason Tebb, President of OnTheMarket, says: “Although historic, the Land Registry data shows house values continued to rise on an annual basis in July, with the average property price £8,000 higher than a year ago.
“However, affordability continues to be a challenge and is keeping prices in check to an extent as buyers take advantage of their strong negotiating position.
“The market is demonstrating remarkable resilience, assisted by five interest rate reductions in the past year and the expectation of more to come. However, with inflation remaining stubbornly high at 3.8%, there will be concerns that the chances of the next rate cut coming this month have reduced.”
STAMP DUTY CONCERN
Amy Reynolds, Head of Sales at Richmond estate agency Antony Roberts, says: “House-price growth is showing further signs of flattening, which may reinforce the current market caution leading to more sellers adjusting their expectations as to what they can achieve for their home.
“A sudden drop in prices is not expected as many people still have low mortgage rates and in our area in particular, plenty of equity in their homes and stable jobs. Well-priced, well-located homes continue to perform.
“Affordability remains the brake on the housing market. Never in my 25 years in the industry have I had so many conversations with people about the cost of stamp duty. The high cost of moving is prohibiting home moves that people want to make, but don’t feel confident enough to do so and is leading to stagnation in the market in certain areas.”
