What’s happening with UK house prices? Latest property market moves and forecasts

Activity in the property market has started to pick up following a lull in the wake of stamp duty changes, but house price growth could remain muted this year.

A glut of properties on the market is keeping sellers in check when setting a price, meaning several experts have downgraded their 2025 growth forecasts in recent months.

House prices are still expected to end the year in positive territory, but estate agency Savills has lowered its forecast from 4% to 1%. Meanwhile, Rightmove has halved its prediction from 4% to 2%.

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These forecasts refer to the UK as a whole, but there is significant regional variation with prices currently rising more rapidly in the north of the country, where affordability is less stretched than in the south.

While weaker growth forecasts might come as bad news to homeowners who want to see the value of their property shoot up, the market is proving fairly resilient overall.

Lower asking prices are boosting sales activity, according to Rightmove. The property site recently reported the busiest July since 2020’s post-lockdown rush, with the number of sales up 8% annually.

Saving up a deposit and having enough income to cover mortgage repayments is still a challenge, but some experts think pressures are starting to ease.

“Affordability should continue to improve gradually if income growth continues to outpace house price growth as we expect,” said Robert Gardner, Nationwide’s chief economist.

“Borrowing costs are also likely to moderate a little further if Bank Rate is lowered again in the coming quarters.”

Despite this, the latest figures from Nationwide showed an unexpected drop in house prices in August, with the average property down 0.1%.

Latest house price moves

There are at least five different indices that measure how much UK house prices have gone up or down over the past month and year. The most authoritative one comes from HM Land Registry, but lenders like Halifax and Nationwide also publish trusted house price data.

HM Land Registry has the most comprehensive data set, as it includes cash purchases as well as those financed through a mortgage, but the main drawback is that it is published with a six-week time lag. This means other sources can give a better snapshot of current conditions.

The latest HM Land Registry report, published on 20 August, shows prices rose by 3.7% in the 12 months to June. On a monthly basis, prices rose by 1.4%. It brings the average UK property to £269,000, which is around £9,000 higher than a year ago.

Among the UK nations, prices grew at the fastest rate in Scotland (5.9% annually). Northern Ireland came in second place (5.5%), followed by England (3.3%) and Wales (2.6%). Of the English regions, the North East experienced the fastest growth (7.8%), while London saw the slowest at 0.8%.

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. This also uses HM Land Registry data.

The latest report from Halifax points to a slower rate of growth. House prices rose by 2.4% on an annual basis in July, and 0.4% on a monthly basis, according to the lender. August’s figures from Nationwide look even softer, with annual growth slowing to 2.1%. On a monthly basis, prices unexpectedly dropped by 0.1%.

“House prices are still high compared to household incomes, making raising a deposit challenging for prospective buyers, especially given the intense cost-of-living pressures in recent years,” Gardner said.

“Combined with the fact that mortgage costs are more than three times the levels prevailing in the wake of the pandemic, this means that the cost of servicing a mortgage is also a barrier for many.”

Despite this, he expects affordability to improve going forward given the current wage and interest rate environment. “This should support buyer demand, especially since household balance sheets are strong and labour market conditions are expected to remain solid,” he said.

Property asking prices under pressure

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 property site Rightmove shows that asking prices fell by 1.3% on a monthly basis in August, in line with the 10-year average for this time of year. It follows larger-than-usual falls in June and July.

The average asking price for a property is now £368,740 – almost £5,000 less than a month ago and just 0.3% higher than a year ago. Rightmove said sellers were pricing their properties more realistically to attract holiday-distracted buyers.

“Buyers have the upper hand in this high-supply market, so a tempting price is vital to agree a sale. The strategy is working, with the number of sales agreed in the full month of July being the best at this time of year since 2020,” said Colleen Babcock, property expert at Rightmove.

Will house prices rise beyond 2025?

Some experts think house price growth could pick up in 2026 and beyond. Savills is currently forecasting 4% growth in 2026, 6% in both 2027 and 2028, and 5.5% in 2029.

The estate agency expects wages to grow 22% between 2025 and 2029. Combined with a strengthening economy in the latter part of this time frame, it thinks it will “boost buyer confidence and the willingness to take advantage of improved mortgage conditions”.

Savills also thinks falling mortgage rates and more relaxed affordability tests from lenders could boost transaction volumes, making it easier for first-time buyers to get onto the housing ladder. Following encouragement from policymakers, some lenders are allowing mortgage customers to borrow more than they could previously.

Under the old rules, less than 10% of new mortgages exceeded 4.5 times a borrower’s income, but the Bank of England recently said it would be happy to see that percentage rise to more than 15%. Nationwide said it means applicants can borrow £28,000 more on average.

Estate agency Knight Frank has slightly more muted expectations than Savills, but still expects the rate of house price growth to pick up from 2026. It is forecasting growth of 4% in both 2026 and 2027, 4.5% in 2028 and 5% in 2029.

Will stamp duty be replaced?

A lot could change between now and the end of these forecast periods, including interest rate expectations, the health of the UK economy, and government policy. In recent weeks, headlines have focused on rumoured property taxes that could be considered as part of the Autumn Budget.

Areas of speculation have included replacing stamp duty with an annual property tax for homes worth more than £500,000, and ending the capital gains tax exemption on first homes worth more than a certain threshold (such as £1.5 million). There are also rumours that landlords could be hit with National Insurance on rental income.

Zoopla believes a stamp duty replacement could impact market activity in higher-value markets over £500,000. “There are big transitional risks and uncertainties of how this might distort the market, while the political risks also seem high,” said Richard Donnell, executive director of research at the property site.

As with all pre-Budget speculation, it is possible these rumours will come to nothing. With this in mind, homebuyers and movers should avoid being tempted into knee-jerk reactions and instead focus on current market conditions and their own personal circumstances when deciding on the best time to buy or sell.