Annual house price growth slowed again in July as buyers and sellers continued to navigate 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 latest data suggests the housing market remains subdued, with ongoing geopolitical tensions, higher energy prices and uncertainty over the future path of interest rates continuing to dampen activity.
The report notes that 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.
However, 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.
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.
By contrast, private renters stay in a property for an average of five years, with around half moving within two years of taking up a tenancy.
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.
Industry reaction:
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.”
Iain McKenzie, CEO of The Guild of Property Professionals: “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.”
“Yesterday’s interest rate decision, with rates remaining unchanged, provides greater certainty for borrowers and allows prospective buyers to plan with a clearer understanding of future mortgage costs.
“The next priority should be greater policy certainty. As the new Prime Minister develops his housing agenda, clarity around taxation, housing supply and long-term reforms will help reinforce confidence across the market. Stability in policy is every bit as important as stability in interest rates.”
Jeremy Leaf, north London estate agent: “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.
“This survey has proved to be a particularly accurate long-term identifier of market health as it is linked to customer mortgage offers and recorded on approval.
“The main issue for us now is generating sufficient commitment and momentum while so much uncertainty remains about the likely path of mortgage rates and inflation, partly prompted by the unexpectedly protracted Iran war.
“Looking forward, our offices have recorded a significant uptick in valuation appraisals and buyer registrations so we are anticipating a busy up post-summer holiday period.”
Nicky Stevenson, MD at Fine & Country: “House price growth remains subdued, but the market is still holding steady in a way that is sustainable to both buyers and sellers.
“Annual growth easing to 1.8% shows that the market has lost some of the momentum we saw earlier in the year, but a small monthly rise suggests there is still underlying resilience. Buyers are active, but they are taking their time and weighing up affordability carefully before committing.
“The wider backdrop has been doing a lot of the work here. Higher energy costs and shifting expectations around interest rates have all tested confidence in recent weeks. It is no surprise that some buyers have paused for breath while they wait for a clearer picture on mortgage pricing and household costs.
“In many parts of the country, our agents are seeing that the activity is still there, so long as homes are priced in line with local demand and buyers feel they are getting fair value.
“July can also be a more measured month for the property market, as the intensity of the spring season gives way to the summer holiday period. That can make activity feel quieter on the ground, but it does not mean demand has gone away.
“What matters now is whether inflation continues to ease and gives lenders more room to compete on mortgage pricing. If borrowing costs become more predictable, that should help rebuild confidence among buyers who are ready to move but have been waiting for more certainty.”
Gareth Lewis, deputy CEO of specialist lender MT Finance: “Nationwide’s figures reflect a softening housing market. From a lending perspective, we are seeing valuers cautious on value while buyers are looking for a steal and prepared to negotiate hard on price.
“After a strong start to the market this year, we are now seeing the ramifications of an interest rate environment which has become unstable again, and the impact this is having on transactions. Volatile funding rates are the real issue at the moment; while everything pointed towards a lower interest rate environment at the start of this year, the impact of war in the Middle East has since changed this outlook.
“The latest hold in base rate at 3.75 per cent was the right call from the MPC, and this combined with June’s lower inflation figure should help inspire confidence among borrowers and lenders. Andy Burnham and John Healey should be given time to start implementing their economic vision before any changes are made to interest rates.”
Ian Futcher at Quilter: “According to Nationwide, house prices rose by just 0.1% in July, while annual growth slowed to 1.8% from 2.2% previously, bringing the average property price to £277,542.
“This relatively subdued snapshot of the housing market shows activity is far from booming. The latest Bank of England money and credit statistics showed net mortgage approvals rose slightly to 58,200 in June but remained below the average of the previous six month period. Affordability continues to be a significant challenge, particularly as mortgage rates have drifted higher in recent weeks amid renewed tensions in the Middle East, which is keeping many prospective buyers sat waiting on the sidelines.
“The Bank of England monetary policy committee’s decision to hold rates yesterday will provide some reassurance to borrowers. There had been growing concern that the renewed pressure on oil prices could complicate the inflation outlook and prompt a more hawkish response from policymakers. However, while a hold offers a degree of stability, we’re unlikely to see a meaningful reduction in mortgage costs for a while yet. Given concerns around inflationary pressures and the uncertain economic backdrop, lenders will remain cautious in their pricing.
“For now, the housing market remains in a holding pattern. Any meaningful shift in house prices will depend on how inflation, interest rates and consumer confidence evolve over the coming months, alongside whether mortgage affordability begins to improve.”
Jason Tebb, president of OnTheMarket: “Average property values were flat on a monthly basis as focused, price-sensitive buyers negotiate, while sellers realise they will struggle to sell over-ambitiously priced homes when there is more stock to choose from.
“Despite the impact of renewed hostilities in the Middle East on inflation and subsequently interest rates, stalling the expected downwards momentum of base rate this year, the resilience of the market is evident. The signs are that the market has steadied itself and buyers and sellers are getting on with it. The Bank of England’s decision to hold interest rates again yesterday for the fifth consecutive meeting is having a steadying effect, suggesting a calm, considered approach with no need to panic.
“Mortgage rates are edging upwards, which may increase affordability concerns for buyers in the short term but those who need to move are doing so regardless and are just negotiating harder on the price they are prepared to pay. Inactivity isn’t an option for many, even if a new Prime Minister brings another level of uncertainty. What we do know is that Andy Burnham is instinctively interventionist and housing is where we will feel it first. For our sector, the likely picture is more regulation on the rental side and a real push on supply that will take years to show up in the numbers.”
Comments (1)
This totally contradicts the article about a Burnham Bounce.