What’s happening with UK house prices? Latest property market moves and forecasts
Stamp duty changes put the brakes on the property market earlier this year, but buyers could now be starting to return. What does it mean for house prices?
House prices have had a wobble in the wake of stamp duty changes, but experts believe things could start to pick up as the year progresses.
Buyers and home movers rushed transactions through in the first three months of 2025 before the stamp duty allowances dropped, resulting in a busy start to the year, but this has restricted market activity more recently.
Annual house price growth looks more robust. Prices are still 2.1% higher than they were a year ago, according to Nationwide, bringing the average UK property to £271,619. Halifax reports a slightly higher annual growth rate (2.5% in June), bringing the average price to £296,665.
“We expect activity to pick up as the summer progresses, despite ongoing uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive,” said Nationwide’s chief economist Robert Gardner.
“The unemployment rate remains low, earnings are rising at a healthy pace in real terms, household balance sheets are strong and borrowing costs are likely to moderate a little if interest rates are lowered further in the coming quarters, as we and most other analysts expect.”
Survey data from the Royal Institution of Chartered Surveyors (RICS) supports this view, with respondents reporting an increase in new buyer enquiries in June. It is the first month this metric has turned positive since December 2024.
Despite this, a glut of supply could keep house price growth in check, with 14% more homes on the market than a year ago, according to property listing site Zoopla. This is restricting the rate of house price growth, particularly in expensive areas.
“In London and the South East and South West regions of England, the number of homes for sale is 16-19% higher than a year ago. At the same time, house prices are barely rising – by less than 0.5% over the last year,” said Richard Donnell, Zoopla's executive director of research.
“In contrast, regions in the North of England, the West Midlands and Scotland have registered only a modest change in supply, creating an element of scarcity. This is supporting above-average price inflation of 2-3%.”
What do official house price figures show?
The most authoritative source on house prices is HM Land Registry. Its dataset covers more of the market than Halifax and Nationwide, because it includes cash purchases as well as those financed through a mortgage.
The main problem is that Land Registry data is published with a six-week time lag, meaning other sources can give a better snapshot of current market conditions.
The latest report shows prices rose by 3.9% on an annual basis in May. This is higher than April’s revised estimate of 3.6%, but significantly lower than the 7% growth rate recorded during March’s stamp duty rush.
It brings the average UK property to £269,000 – around £10,000 higher than a year ago.
Transaction volumes are starting to show signs of normalising after the recent stamp duty changes. Volumes were up 25% on a monthly basis in May, but are still 12% lower than a year ago.
Regional house price variations
Naturally, there are regional variations when it comes to house price growth.
Among the UK nations, prices are growing at the fastest rate in Northern Ireland (9.5% annually), according to the latest report from HM Land Registry. Scotland comes in second (6.4%), followed by Wales (5.1%) and England (3.4%).
Of the English regions, the North East is experiencing the fastest growth (6.3%). The South West saw the lowest level at 1.9%.
Using the “house prices in your area” report from the Office for National Statistics can help you understand how prices have changed in your borough or local authority area.
A recent special report from Nationwide also found that rural areas have outpaced urban areas in recent years. Between December 2019 and December 2024, house prices in predominantly rural areas increased by 23%, compared with 18% in areas that are largely urban.
Are property asking prices going up?
Asking prices are a useful barometer for market sentiment as it currently stands. These snapshots tend to be published only a few weeks after the data was recorded. The drawback is that asking prices don’t necessarily reflect the final sold price.
Data from Rightmove shows that asking prices fell by 1.2% in July, the biggest slump for the month in over 20 years, with sellers asking for less amid an increasingly competitive market.
The average asking price for a property is now £373,709 – £4,531 less than a month ago, and just 0.1% higher than a year ago.
Colleen Babcock, property expert at Rightmove, said the decade-high number of houses on the market means buyers can quickly spot when a home looks overpriced compared to others.
“It appears that more new sellers are conscious of this and are responding to this high-supply market with stand-out pricing to entice buyers and get their home sold,” she added.
This appears to be the case across the UK, but declining prices have been particularly felt in the UK’s capital – asking prices in Greater London fell by 1.5% in July, while prices for prime inner London properties dropped by 2.1%.
This price fall is reflected in every UK region apart from the East Midlands, where prices were static, and the North East, where asking prices grew by 1.2%.
Will house prices rise in 2025?
Some forecasts for the future of house prices have been revised down in recent weeks after price growth continued to slow in the first half of 2025.
Rightmove now expects the average asking price for a home to rise by just 2% over the course of 2025, a significant downgrade from its 4% forecast at the start of the year.
Savills agrees that growth has been lower than expected. It now expects average prices to rise by just 1% in 2025 – far below its original estimate of 4%.
Lucian Cook, head of residential research at Savills, said: “The last three months have been marked by a lack of buyer activity, despite improving affordability, and annual house price growth slowed to 2.1% in the year to June, according to Nationwide (down from 4.7% in December 2024).
“In light of this and the potential for more buyer uncertainty in the run up to the Autumn Budget, we have revised our house price forecast for this year.”
There is, however, a silver lining.
Savills now expects five-year price growth to increase. Its forecasting model shows the average UK house price could grow by 24.5% by the end of 2029 – up 90 basis points from its previous estimate.
This level of growth implies that house prices will increase by an average of £86,300 over five years.
Cook said that “easing of mortgage regulations, including more flexibility on affordability stress tests and higher allowances for loans above 4.5 times income, is likely to boost transaction volumes, particularly by helping more first-time buyers get on the ladder.”
“As a result, we expect that by 2027, transaction numbers will approach the post-GFC norm of 1.2 million per year,” he added.
Regionally, Savills thinks price growth in London will be far slower than in the rest of the country at just 15.3% over five years.
On the other end of the scale, the estate agency thinks house prices in the North West will far outpace the UK average. It anticipates growth of 31.2% in the region by the end of 2029.
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Katie has a background in investment writing and is interested in everything to do with personal finance, politics, and investing. She enjoys translating complex topics into easy-to-understand stories to help people make the most of their money.
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Before joining the MoneyWeek team, Katie worked as an investment writer at Invesco, a global asset management firm. She joined the company as a graduate in 2019. While there, she wrote about the global economy, bond markets, alternative investments and UK equities.
Katie loves writing and studied English at the University of Cambridge. Outside of work, she enjoys going to the theatre, reading novels, travelling and trying new restaurants with friends.
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