Industry voices highlight supply challenges and affordability concerns
Average house prices in the UK rose by 3.7% in the year to June 2025, reaching £269,000, the latest figures from the Office for National Statistics have shown, marking an increase on the 2.7% annual growth recorded in May.
In England, the typical property price reached £291,000 in June, representing a 3.3% rise over the previous year. This rate was above the 2.3% annual growth seen in May. In Wales, the average price stood at £210,000, up 2.6% year-on-year, though this was a slower rate than the 4.5% reported in May. Scotland’s average house price increased to £192,000, a 5.9% annual rise, which was higher than the 4.1% recorded in the previous month. Northern Ireland saw average prices reach £185,000 in the second quarter of 2025, up 5.5% from the same period in 2024.
Among English regions, the North East experienced the highest annual house price inflation at 7.8%, up from 5.8% in May. London recorded the lowest annual increase, with prices rising by 0.8%, unchanged from the previous month.
“An uplift in house prices reflects a quiet but steady confidence in the market, as we continue to move further away from the turbulence of recent economic events,” said Nick Leeming (pictured far left), chairman at Jackson-Stops, commenting on the ONS house and private rent prices data.
“Buyers are increasingly focused on the tangible realities of today’s housing landscape, rather than being distracted by speculation or uncertainty. There remains a healthy level of housing stock available, yet competition for well-priced, quality homes is driving swift sales from committed buyers.
“While rumoured changes to Stamp Duty suggest the Treasury is open to bold, out-of-the-box thinking to improve market dynamics, these ideas remain speculative for now. Until concrete action is taken, they are simply words, not policy. Our recent research revealed that of the 15% of over-55s who plan to downsize would do so within the next year if stamp duty were removed or reduced on their onward purchase.
“Encouragingly, the recent cut to the base rate to 4% has brought fixed-rate mortgages comfortably below 5%, restoring buyer affordability to levels not seen since 2022. This is a welcome development, especially as millions of homeowners approach the end of their fixed rate deals this year and are considering what to do next.”
Tanya Elmaz (pictured second from left), director of sales at Together, agreed that the latest rise in house price figures suggest a growing resilience in the housing market after a period of slower activity.
“The Bank of England’s move to cut the base rate should help lower the cost of fixed rate mortgages, while boosting overall confidence and liquidity in the economy, encouraging home-buyers, developers and investors to move ahead with projects that may have previously been on hold,” she said.
“There are plenty of opportunities out there, so those who are keen to move forward with their property ambitions should explore the range of financial products and schemes available. Speaking to a mortgage professional is a great way to assess all the options available before making a final decision.”
Average UK:
— Office for National Statistics (ONS) (@ONS) August 20, 2025
• house prices increased by 3.7%, to £269,000, in the 12 months to June 2025, up from 2.7% in the 12 months to May
• monthly private rents up by 5.9%, to £1,343, in the 12 months to July 2025, down from 6.7% in the 12 months to June
➡️ https://t.co/FZaF6ImGIY pic.twitter.com/547R2YhUcg
Meanwhile, private rents also continued to rise, though at a slower pace. The average monthly rent across the UK reached £1,343 in July 2025, up 5.9% over the year. This was a reduction from the 6.7% annual growth recorded in June.
In England, average rents stood at £1,398, a 6% increase. Wales and Scotland saw average rents of £807 and £999, rising by 7.9% and 3.6% respectively. Northern Ireland’s average rent reached £855 in the year to May, an increase of 7.4%.
Within England, the North East recorded the highest annual rent inflation at 8.9%, while Yorkshire and The Humber saw the lowest at 3.5%.
“Rents are still edging upwards, but there are signs that tenant demand has eased slightly over the summer,” said Alex Upton (pictured second from right), managing director of specialist mortgages and bridging finance at Hampshire Trust Bank. “Even so, a modest slowdown doesn’t change the underlying picture. We are still significantly short of the rental stock needed to meet demand, and that structural gap will keep upward pressure on rents for the foreseeable future.
“That’s the key message for brokers and landlords. While the market may be adjusting at the margins, the long-term fundamentals haven’t shifted. Professional landlords will continue to invest in quality assets, and strategic portfolio planning remains essential. Securing the right funding and preparing for future regulation will be critical in navigating what comes next.
“Over time, it’s also vital that we focus on the right kind of supply. A resilient rental market depends not just on volume, but on quality, accessibility and long-term affordability. Achieving that requires joined-up thinking, targeted investment and policy that supports both tenants and landlords.”
For Louisa Sedgwick (pictured far right), managing director of mortgages at Paragon Bank, the continued moderation of private rental growth is a positive sign, but she also noted that monthly payments remain at a level that will stretch many tenants.
“This is because rent inflation has swelled significantly from 1% in the first quarter of 2021 to a record high of 9.0% seen at the end of 2024,” she said. “This correlates with increased demand seen since the pandemic.
“It is crucial then that supply matches demand, something that will persist, fuelled by a range of factors including more people living alone or entering higher education, in addition to projected population growth, more broadly.
“In order to increase PRS stock and slow rent inflation, investment must be financially viable and protected by balanced regulation that considers landlords’ interests as well as tenant rights. Lenders and our industry partners can help by providing a range of finance products to meet landlord needs, but policymakers also have an important part to play if we’re to see a fair and functioning PRS.”
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