"The story of the housing market in 2025 has been one of stability. Since January, prices have risen by less than £600, underlining how steady the market has been despite wider economic pressures"
- Amanda Bryden - Halifax
House prices continued their upward trend in August, rising by +0.3%. This marked the third month in a row of price increases, with the average property now valued at £299,331, a new record high. Annual growth eased slightly to +2.2%, compared with +2.5% in July.
Although overall values increased, affordability improved for first-time buyers as their average purchase price dipped slightly. Northern Ireland remained the strongest performer among UK nations, while England showed a clear North/South split, with the North East leading regional growth.
National and regional breakdown
Northern Ireland maintained its position as the strongest market for annual house price growth, with values up +8.1% over the past year. This represented a slowdown from +9.3% in July. The average home there now costs £217,082.
Scotland recorded the next strongest annual increase, with prices rising +4.9% in August to £215,594. Wales also saw an increase, up +1.6% year-on-year, although the pace of growth has been easing. The average home in Wales is now £227,786.
In England, the North East, North West, and Yorkshire & the Humber all recorded annual growth above +4%, making them the fastest-rising regions. By contrast, the South West saw prices fall -0.8% over the past year. This was the first annual decline for any UK nation or region since Eastern England in July 2024, when prices fell -0.2%.
London continued to post modest gains, with values rising +0.8% year-on-year. It remained the most expensive part of the UK, with the average property priced at £541,615.
Market outlook
“UK house prices rose again in August, up by +0.3% (£932), marking the third consecutive monthly increase,” explained Amanda Bryden, head of mortgages at Halifax. “The average property price now stands at £299,331 – a new record high – although annual growth has eased slightly to +2.2%.”
“The story of the housing market in 2025 has been one of stability. Since January, prices have risen by less than £600, underlining how steady the market has been despite wider economic pressures,” Bryden noted. “Affordability remains a challenge, but there are signs of improvement. Interest rates have been on a gradual downward path for nearly two years, and many of the most competitive fixed-rate mortgage deals now offer rates below 4%.”
“Combined with strong wage growth, which has outpaced house price inflation for nearly three years, this is giving more prospective buyers the confidence to take the next step,” Bryden continued. “Summer is typically a quieter period for the market, so the recent rise in mortgage approvals to a six-month high is an encouraging sign of underlying demand.”
“While the wider economic picture remains uncertain, the housing market has shown over recent years that it can take these challenges in its stride. Supported by improving affordability and resilient demand, we expect to see a slow but steady climb in property prices through the rest of this year,” Bryden added.
First-time buyers see improvement
“Though overall prices have edged higher, average property values for first-time buyers moved in the opposite direction over the summer, a trend that will be welcomed by those looking to get on the ladder,” Bryden commented. “For those able to overcome the hurdle of saving a deposit, the numbers increasingly stack up. The typical first-time buyer property now costs £237,577, down 0.6% since May. On a 95% LTV mortgage over 30 years, that could mean monthly repayments of around £1,179 compared to the average UK private rent of £1,343.”
Industry reaction
Tom Bill, head of UK residential research at Knight Frank, said, “Stable mortgage rates have helped the housing market get back on its feet after the April stamp duty cliff edge, but high levels of supply mean annual price growth has drifted lower."
"Although there is a risk that some buyers and sellers hesitate ahead of the Budget, which would increase downward pressure on prices, others may be keen to accelerate their plans, which would have the opposite effect. It will depend on whether people are more focused on possible changes to stamp duty or capital gains tax. The former feels too difficult to attempt, and the latter feels politically toxic.”
Nathan Emerson, CEO at Propertymark, comments, “With the number of listings, sales agreed, and stock levels higher than this time last year, and with some banks offering specific help to first-time buyers to take their first step onto the housing ladder, this is a sign that the housing market is holding firm.
“However, the latest announcements from the UK Government about reforming Stamp Duty and charging landlords with National Insurance contributions ahead of the next Budget will continue to add further uncertainty for many potential buyers and sellers. This may delay moving plans for a number of people until they know for sure what is likely to happen next. Therefore, we need to see further clarity from the UK Government sooner rather than later.”
Guy Gittins, CEO of Foxtons, said, “Following interest rate reductions, improving mortgage affordability and the increasing number of higher loan-to-income ratio products available, we’re now seeing the uplift in mortgage market activity begin to convert into transactional growth. In turn, the rate of house price growth is starting to accelerate.
"Market momentum remains steady and this underlying stability is encouraging buyers and sellers back into the fold, albeit with a degree of caution ahead of November’s budget.
"For those looking to sell, the key to success is a pragmatic approach to pricing in line with current market conditions.”
Marc von Grundherr, Director of Benham and Reeves, says, “Another month of measured house price growth and the third consecutive monthly increase seen confirms what we’ve been seeing on the ground - a slow but steady market trajectory that demonstrates buyer and seller activity is building, albeit gradually.
"Whilst the market has stabilised considerably in recent months, there’s now a new layer of uncertainty hanging over us as we look towards the Autumn Budget and this is likely to keep many buyers, in particular, sitting on the fence for the short term.
"However, for many, this isn’t about the threat of higher costs or new taxes, but rather the possibility of stamp duty being scrapped altogether. Understandably, buyers are keen to wait and see if such a significant financial barrier is removed and should the government take that step, we can expect a sugar rush of sudden house price inflation as buyer activity is supercharged like never before”
Verona Frankish, CEO of Yopa, commented, “House prices continue to edge higher, underlining the resilience of the market in the face of wider economic pressures and the continued drive from the nation’s homebuyers to climb the ladder.
"Improved mortgage affordability is encouraging more buyers to return and this is a trend that is only likely to build as we approach the final stretch of 2025 and the rush to complete before Christmas.
"However, the prospect of a stamp duty reform is a powerful incentive which may temper this usual seasonal surge in activity, at least until the dust has settled on the Autumn Budget.”
Jason Tebb, President of OnTheMarket, comments, “Average house prices have hit a record high, although this headline figure conceals considerable regional variations and differences according to property type. The resilience of the property market is all the more remarkable given wider political and economic concerns.
"While prices have risen again, they are being kept in check to an extent by affordability concerns, despite five interest-rate reductions in the past year. Overall, the housing market is steady, although with increased levels of new instructions, longer transaction times and more competition for buyers, sellers should have realistic expectations if they are wish to move before the end of the year."
