UK house price growth slowed to 2% in the year to June, with the average home valued at £272,000, according to the latest government figures.
The annual increase was down from a revised 3% in May, while prices edged up by just 0.1% month-on-month, the UK House Price Index from HM Land Registry revealed.
England recorded annual growth of 1.8%, taking the average property price to £293,000, although significant regional differences remained.
The North West recorded the strongest annual performance in England, with prices rising by 4.7% to an average of £220,000. The North East followed with growth of 4.3%, while Yorkshire and the Humber saw prices increase by 3.6%.
LONDON PRICES REMAIN UNDER PRESSURE
London remained the weakest-performing English region, with average prices falling by 2.5% over the year to £554,000.
However, the capital recorded a 1% monthly increase in June, suggesting some improvement compared with May.
Flats and maisonettes continued to weigh heavily on London’s market, falling 4.7% annually to an average of £431,000. Detached homes were down 0.7% at £1.162 million, while semi-detached properties bucked the trend with a 0.6% annual increase.
Across England as a whole, flats and maisonettes were the only property type to record an annual decline, falling 2.3% to £219,000. Semi-detached homes recorded the strongest growth at 3.2%.
NORTH-SOUTH DIVIDE CONTINUES
The figures continued to underline the divide between some of England’s more affordable northern markets and higher-priced areas in the south.
Alongside the North West’s 4.7% increase, prices rose by 2.6% in the West Midlands and 2.4% in the East Midlands.
By comparison, annual growth was just 0.3% in the South East and 1.1% in the East of England.
Wales recorded annual house price growth of 1.8%, taking its average property value to £213,000, although prices fell 0.9% during the month.
TRANSACTIONS HOLD UP
Separate property transaction figures showed an estimated 99,000 UK residential transactions worth £40,000 or more took place in June on a seasonally adjusted basis.
That was 2.5% higher than in June 2025, although transaction numbers dipped by 0.2% between May and June.
The latest HPI suggests the market remained broadly stable heading into the summer, but with price growth losing momentum nationally and increasingly divergent performances between different regions and property types.
INDUSTRY REACTION
Richard Donnell, Executive Director of Research at Zoopla, says: “Housing sales market activity has been hit hard over the summer by higher mortgage rates which have hit buying power and slowed price inflation. Movers have taken stock of the political and economic backdrop.
“However people can’t put decisions on hold indefinitely and we expect a rebound in activity in September and October with some early signs of a return of buyers. Buyers have a huge choice of homes for sale and aren’t in a rush so sellers who really want to move need to price realistically to attract buyers and secure a sale.
“Higher borrowing costs have hit first time buyers harder than homeowners and this means people are renting for longer which will support demand for rented homes and steady growth in rents, particularly as we come into the busy time of year for the rental market as students and those starting new jobs compete for a still scarce supply of rented homes. Rents are rising slowly in many big university cities but growth is faster in affordable towns adjacent to big cities.”
NERVOUS SELLERS
Nathan Emerson, CEO at Propertymark, says: “The UK’s housing market is central to the country’s economic engine, so any fall in house prices can naturally create a sense of nervousness among sellers, especially when looking at the figures year on year.
“While short-term fluctuations are a normal part of the property market, they can influence confidence and lead some homeowners to delay decisions until there is greater certainty about the direction of the market.
“It will, however, be a case of closely watching how matters progress over the coming months, as significant uncertainty remains, particularly when considering the wider global economy.
“Across all nations, housing remains a key political focus, and there are significant challenges still to overcome. We recently witnessed Andy Burnham enter Downing Street, specifically highlighting housing as an issue that must remain at the heart of the UK Government’s attention moving forward.”
SQUEEZED AFFORDABILITY
Jason Tebb, President of OnTheMarket, says: “Although a little dated, Land Registry figures show property values continued to rise on an annual basis in June, with the average property price £5,000 higher than a year ago.
“Increased stock, more choice and squeezed affordability are likely to keep prices in check for the foreseeable future, which is encouraging for first-time buyers in particular.
“However, the national average conceals significant regional differences depending on where you are in the country, with property prices rising by 4.7% in the North West while contracting by 2.5% in London.
“In the capital, this was the tenth consecutive fall due to the increase in stock available and buyers finding it harder to raise the necessary finance to afford properties which can be considerably more expensive than in other areas.
“While lenders have been easing mortgage rates in recent days, inflation rising to 2.9% in the year to July – while unexpected given the rise in energy prices – is concerning for borrowers.
“The Bank of England’s decision to hold base rate for five consecutive meetings has provided some welcome stability, enabling buyers and sellers to plan ahead with more confidence, and hopefully this steady approach will continue for a while at least.”
PRICE-SENSITIVE MARKET
Nick Leeming, Chairman of national estate agency Jackson-Stops, says: “The figures point to a market holding broadly steady. Buyers are still moving, but tighter affordability means price, quality and value are determining which homes secure attention. This is a market that is increasingly price-sensitive.
“June brought the start of a political transition, with Andy Burnham emerging as the likely next Prime Minister and prompting renewed debate about the incoming Government’s approach to property taxation.
“While Burnham has since ruled out changes to stamp duty at the next Budget, the tax remains a significant barrier to movement. Our own research found that removing these costs could bring more than 300,000 owner-occupied homes onto the market across England within less than a year.
“June also offered buyers only a brief period of greater mortgage-rate stability, but borrowing costs still remained materially higher than at the beginning of the year.
“Buyers now have more choice, more time and greater negotiating power. Sellers can still attract committed purchasers, but they must engage with the market as it is, not as they might wish it to be.
“That means listening to good advice from local agents and pricing with confidence and realism from day one. Realistic pricing is not about leaving value on the table; it is how sellers create competition for it.”
CAUTIOUS OPTIMISM
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “This picture of a subdued housing market is not surprising, yet it doesn’t tell the whole story.
“Certainly, in our part of the world in Richmond, the market seems to be through the worst of the correction. Prices aren’t rising rapidly, but they are stabilising, and the underlying level of applicant demand we have seen over the Summer gives me some cautious optimism for the Autumn.
“Applicant registrations have been higher than usual – we’ve seen a 52% increase in applicants registering in Richmond year-on-year compared with a 1% fall across London.
“Lack of available stock is helping support prices, particularly given the continued demand for safe, green areas with excellent schools and transport links. There are still challenges, with some buyers reducing their expectations (to avoid Mansion Tax) and some owners looking to downsize financially, which is less typical for the area.
“We may see some uncertainty ahead of the Budget, but perhaps less of a ‘wait and see’ mentality than previously. There is still a strong underlying desire to move, and where the right property is available, buyers appear increasingly willing to get on with it rather than wait indefinitely for greater certainty.”
ACTIVE MARKET
Iain McKenzie, CEO of The Guild of Property Professionals, says: “The slowdown in property prices reflects a market facing a number of competing pressures.
“Inflation has edged higher, the Bank Rate remains at 3.75%, and affordability continues to constrain many buyers. The summer market has also been quieter than usual, with more homes coming onto the market and buyers taking longer to make decisions.
“However, it would be wrong to interpret softer price growth as a lack of resilience. Mortgage approvals increased in June, mortgage product availability has continued to improve, and major lenders have begun reducing rates on residential mortgages again.
“Property transactions also stabilised, with activity in the first half of the year remaining ahead of 2024 and only modestly below last year’s levels.
“The picture is increasingly one of a price-sensitive and highly localised market. With supply close to a 12-year high for this time of year, buyers have more choice and sellers face greater competition. Properties that are accurately priced, well-presented and aligned with local demand are still attracting interest and achieving sales.
“Looking ahead to the autumn, we expect activity to pick up as the usual seasonal bounce returns, provided mortgage rates continue to ease and economic uncertainty does not intensify.
“Price growth is likely to remain modest for the rest of the year, with the market increasingly driven by affordability and local conditions rather than broad national momentum.
“For buyers and sellers alike, the key message is that the market remains active, but strategy matters more than ever. Understanding the realities of the local market, and getting the pricing, presentation and timing right, will be crucial to making a successful move.”
BUDGET UNCERTAINTY
Tom Bill, Head of UK Residential Research at Knight Frank, says: “House price growth is slowing to zero as borrowing costs remain high and uncertainty surrounds which taxes will be increased in the autumn Budget.
“Weakness in the labour market means the Bank of England is unlikely to hike rates any time soon but almost six months into the Middle East conflict mortgage rates are still around a percentage point higher than they were before it started.
“A seasonal bounce in activity may be more detectable in autumn than it was in spring as rates stabilise, but that will also depend on the extent of any pre-Budget speculation and overall we expect prices to be largely flat this year.
“Rents are being pushed higher as the unintended consequences of the Renters’ Rights Act play out. Some landlords have left the sector, which has reduced supply, while others have increased asking rents to reflect the additional financial risks they face.
“The consequences may be unintended, but they were not unexpected, and a policy designed to tip the balance of power towards tenants is adding to the financial pressures they already endure.”
FIRMER FOOTING
Jonathan Hopper, CEO of Garrington Property Finders, says: “London’s long and painful correction is finally easing. Property values in the capital have fallen on an annual basis for 10 months in a row, but there are increasing signs that prices have finally bottomed out.
“On a monthly basis, prices surged back to growth in June. The average London property jumped in value by £9,000 over the month, and while one month of Land Registry data does not a summer make, we may have reached a tipping point as tactical buyers who’d been waiting for the right moment to strike return to the London market.
“With markets in the capital and much of southern England still awash with supply, buyers are spoilt for choice and able to negotiate hard on price. However as the imbalance between demand and supply begins to equalise, buyers in the south will start to experience something they’ve largely been spared for much of this year – competition.
“Meanwhile the north-south divide is beginning to ease, with price inflation cooling in northern England, Scotland and Wales. Only Northern Ireland remains a law unto itself with annual price rises accelerating to a breathless 9.2% over the second quarter.
“Huge regional differences remain and while national price growth continues to slow, the market is finding more equilibrium after a volatile start to the year. September is traditionally a busy month for estate agents and the firmer footing revealed by this data should be an encouraging place from which to start.”
GROWTH HOLDING UP
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “As this data covers mortgaged and cash sales, so is the most comprehensive of price surveys, it is particularly interesting to note price growth is holding up better than we’d dared hope.
“On the other hand, the figures reflect activity mainly from several months ago and not the period since the change in prime minister, though worries about mortgage rate and inflation persist.
“In our offices, we are still awaiting evidence of a Burnham Bounce but in the meantime our sellers are dividing between those who recognise the importance of realistic pricing in order to attract the dwindling number of committed buyers and those that don’t.”
“More timely than the sales figures, the rental data confirms what we have seen on the ground – that demand remains strong, particularly for higher-end houses among those returning from holiday seeking accommodation before the new school term.
“Rents have held firm invariably supported by a shortage of supply. Some landlords are still selling due to Renters’ Rights Act and tax concerns and those staying are insisting on better quality references, just in case possession is required. We have also noticed more activity prompted by some tenants taking advantage of new rules rather than remaining in a fixed-term arrangement.”.
INCREASED CHOICE
Nicky Stevenson, Managing Director of Fine & Country, says: “Annual house price growth slowing may grab the headlines, but this does not point to a market in retreat. Instead, it reflects the growing influence of buyer affordability, increased choice and a more cautious economic backdrop.
“For buyers, stock levels are close to a 12-year high for this point in the year, giving them more choice and greater room to negotiate. At the same time, recent reductions in mortgage rates from a few major lenders should provide a welcome boost to buying power.
“For sellers, the message is slightly different. The days of simply putting a property on the market and expecting strong competition are behind us, at least for now. With homes taking longer to sell and more properties competing for buyers’ attention, realistic pricing is becoming increasingly important.
“What is encouraging, however, is that transactions have stabilised and mortgage approvals have improved, suggesting that there remains a solid underlying appetite to move. Buyers have not disappeared, they are simply more selective.
“As we move towards the autumn market, we expect activity to strengthen, but price growth is likely to remain modest. In many ways, that could be healthy for the market: a period of greater stability, where buyers have choice, sellers have realistic expectations, and transactions can continue without prices racing ahead of household finances.”
