UK house price growth remained relatively stable in July, with annual prices increasing by 1.4%, to £273,000, down from 1.5% in the 12 months to June, the latest UK House Price Index from the Land Registry shows.
Average house prices increased by 1.1% in England, lower than in the 12 months to June (1.2%). House price annual inflation slowed for the third consecutive month in England, mainly because of a sharp slowing in the annual rate for the South West, with London and the West Midlands also contributing to the slowdown.
Annual house price growth in Wales increased to 2.6%, from 1.6% in the 12 months to June, with annual growth in Scotland also increasing from 1.6% to 2.3%.
The North East was the English region with the highest house price inflation, at 4.9%, in the 12 months to July, up from 4.0% in June.
The lowest annual percentage change in house price inflation was in London, where prices decreased by 3.3%, down from an annual fall of 3.1% in the 12 months to June. This is the eleventh consecutive month where there has been an annual fall in house prices in London, with Inner London particularly affected, and represents the lowest annual rate for London since January 2024. The average house price in London is now £19,000 below the recent peak in July 2025, at £569,000.
Tom Bill, head of UK residential research at Knight Frank, said: “House prices are essentially flat as higher mortgage costs have taken their toll on demand since the Middle East began in February. Even though the second-round inflationary effects from the war have so far been limited, renewed fears about higher energy prices have nudged mortgage rates higher in recent weeks. We expect continued downward pressure on prices, particularly if pre-Budget speculation about tax rises intensifies, which feels likely as government borrowing costs also increase.”
Jason Tebb, president of OnTheMarket, commented: “The Land Registry figures, while a little dated, show that property values continued to rise on an annual basis in July, with the average property price £4,000 higher than a year ago. Increased stock, more choice and squeezed affordability as inflation continues to rise on the back of the Middle East conflict, are keeping property prices in check.
"The national average property price conceals significant regional differences, with values rising by 4.9 per cent in the North East at the same time as contracting by 3.3 per cent in London. In the capital, this was the eleventh consecutive fall due to the amount of stock available and buyers finding it harder to raise the necessary finance to afford more expensive homes.
"Some of the biggest lenders have increased their mortgage rates in recent days on the back of higher funding costs and the expectation of further interest rate rises from the Bank of England. The Bank's decision to hold base rate for five consecutive meetings has provided welcome stability, enabling buyers and sellers to plan ahead with more confidence, and it is hoped this consistent approach continues for a while at least.”
Nick Leeming, chairman of national estate agency Jackson-Stops, said: "Today’s figures point to a market where realistic pricing increasingly determines which homes sell and those that stall. Across our network, we are seeing a number of properties coming to market with us when they have struggled to secure a buyer with other agents. In many of these cases, getting the price right for current market conditions is proving key to generating renewed interest and ultimately achieving a sale.
“Buyers are still there, but they are informed, selective and have more choice. That means sellers cannot rely on testing the market at an ambitious price and expecting buyers to follow. Homes that are well presented and realistically priced are attracting attention, while those that start too far ahead of buyer expectations risk losing momentum during the crucial first weeks of marketing.
“This is not a market without demand, but it is one in which price and strategy matter considerably. With borrowing costs and the wider cost of moving continuing to shape affordability, sellers who are serious about moving need to respond to the market ahead of them rather than the market of a year or two ago.”
Nathan Emerson, CEO at Propertymark, added: “As we head into the autumn months, it’s encouraging to see strength within the housing market. Across the year, we have seen many key indicators demonstrate just how challenging it has been for would-be home movers in terms of affordability.
“Despite consumer headwinds, the market has broadly remained resilient in terms of average house prices across many regions. There are still challenges yet to overcome, and tomorrow’s base rate decision from the Bank of England will likely set the tone over the coming months regarding overall market confidence.
“In addition, we are now only a matter of weeks away from the next Budget, which may also prove significant for many who are contemplating a house sale or purchase.”
