"This week’s base rate cut may offer some relief to borrowers, particularly first-time buyers, but we don’t expect a significant change in mortgage rates in the short term"
- Rob Owens - e.surv
The latest House Price Index (HPI) from e.surv and Acadata reveals that average house prices in England and Wales declined by 0.6% in July 2025, extending a run of six consecutive monthly falls. At £353,300, average prices are now 2.2% lower than this time last year, reflecting ongoing adjustments in the market following April’s stamp duty changes and a sharp increase in property listings.
Despite this, the outlook for the second half of the year has improved slightly. HMRC figures indicate that transaction volumes began to recover in June, and the Bank of England’s recent base rate cut to 4.0% may help reinforce market confidence.
Rob Owens, head of research at e.surv, said, “This week’s base rate cut may offer some relief to borrowers, particularly first-time buyers, but we don’t expect a significant change in mortgage rates in the short term. Lender caution and broader market conditions continue to weigh on affordability, especially in higher-priced regions like the South East and London.”
The regional picture remains mixed. Southern England continues to drive overall price weakness, with the South East overtaking London as the biggest contributor to annual declines. Prices in the South East are down 3.3% year on year, and fewer than 25% of its local areas have recorded increases over the past 12 months.
In contrast, northern regions have remained more stable. Yorkshire and the Humber recorded a 1.4% annual increase in average prices, while the North East saw a rise of 0.5%. These areas are the only English regions showing positive year-on-year growth.
Rob added, “Nonetheless, rising real incomes and improving sentiment suggest the market may be over the worst of its decline. With further rate cuts expected and no major policy interventions on the horizon, the second half of the year could offer a more stable footing.”
The e.surv Acadata HPI tracks both mortgage and cash transactions, offering a comprehensive view of completed sales across England and Wales.
