Annual house price growth slowed again in July as buyers and sellers continued to face an uncertain economic backdrop, according to the latest figures. House prices increased by 1.8% year-on-year in July, down from 2.2% in June, while values edged up by just 0.1% on a seasonally adjusted monthly basis.
The housing market remains subdued. Ongoing geopolitical tensions, higher energy prices, and uncertainty over the future path of interest rates continue to dampen activity.
Conflict involving Iran has added renewed pressure to energy costs and financial markets, contributing to volatility in expectations for future Bank of England rate decisions.
Easing inflation and slower wage growth could provide policymakers with greater flexibility over future monetary policy. Separate analysis of housing tenure shows households remain in their homes for an average of 14 years, although the length of stay varies significantly by tenure.
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Homeowners who own their property outright have lived in their current home for an average of almost 24 years, with around one in three remaining in the same property for at least 30 years.
Tom Bill, head of UK residential research at Knight Frank, said: “A combination of higher mortgage costs and uncertainty around property taxation has kept demand in check this summer. The slowdown is presumably why Andy Burnham needed to rule out replacing stamp duty with a land value tax this week although the annual game of ‘guess the tax rise’ is not over for the property market after the prime minister repeated his predecessor’s line about ‘difficult decisions’ in the Budget.
Iain McKenzie, CEO of The Guild of Property Professionals, noted: “The latest Nationwide figures reflect a market where buyers have more choice and are taking a measured approach to their purchasing decisions. In the current market, realistic pricing has become more important than ever. Buyers are well informed, have plenty of options available and are willing to negotiate, meaning sellers who continue to price based on yesterday’s market are finding their properties sit unsold for much longer. In contrast, homes that are priced correctly from the outset continue to attract interest and secure sales. While affordability pressures remain, the market itself is proving remarkably resilient. Mortgage approvals have edged higher, signalling that confidence is gradually returning, and there remains a steady flow of buyers who need to move regardless of wider economic conditions. Success in today’s market is less about chasing headline house price growth and more about aligning expectations with current market realities.”
Nathan Emerson, CEO at Propertymark, said: “Steady house prices reflect a housing market that continues to find balance despite ongoing economic and political change. A combination of constrained housing supply, changing borrowing costs, and varying levels of buyer demand continues to influence market conditions, while the national figures mask significant regional variation across the UK.
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The data also highlights that most housing moves occur within the same tenure rather than between tenures. Around three-quarters of households that moved in 2024/25 remained within their existing tenure, with moves within the private rented sector accounting for the largest share of activity.
While around 200,000 households moved from the private rented sector into homeownership during the year, approximately 100,000 owner-occupiers also moved into privately rented homes, illustrating the continued flow between tenures despite subdued market conditions.
Jeremy Leaf, north London estate agent, noted: “After the pick-up in prices last month, it’s interesting but not surprising to note the trend has not been sustained. Buyer power remains so sellers are increasingly obliged to soften prices if they want to maintain transactions.
Tom Bill, head of UK residential research at Knight Frank: “A combination of higher mortgage costs and uncertainty around property taxation has kept demand in check this summer. The slowdown is presumably why Andy Burnham needed to rule out replacing stamp duty with a land value tax this week although the annual game of ‘guess the tax rise’ is not over for the property market after the prime minister repeated his predecessor’s line about ‘difficult decisions’ in the Budget. Mortgage rates are almost as high as they have been since the start of the Middle East conflict but while the Bank of England turned more hawkish this week, holding rates still appears the most likely approach during the second half of this year.”
