Industry awaits clarity on fiscal policy and rental reforms
Average house prices across the UK rose by 3% in the year to August 2025, reaching £273,000, according to figures from the Office for National Statistics (ONS).
House price growth saw a slight deceleration in August from the 3.2% growth rate recorded in July.
In England, the typical property price stood at £296,000 in August, representing a 2.9% increase, or £9,000, over the previous year. This growth rate was marginally lower than the 3.1% seen in July.
Wales reported an average price of £211,000, up 2.0% (£4,000) year-on-year, with the pace of growth also easing compared to the previous month.
Scotland’s average house price reached £194,000, a 4.0% rise (£8,000) over the year, maintaining the same annual growth rate as in July; while in Northern Ireland, the average property price for the second quarter of 2025 was £185,000, up 5.5% (£10,000) from the same period in 2024.
Among the English regions, the North East recorded the highest annual house price inflation at 6.6% for the year to August, though this was down from 6.9% in July. London experienced the lowest rate, with prices falling by 0.3% over the year, compared to a 1.3% increase in the previous month.
Average UK house prices up by 3.0%, to £273,000 in the 12 months to August 2025, down from 3.2% in the 12 months to July.
— Office for National Statistics (ONS) (@ONS) October 22, 2025
Average UK private rents rose by 5.5%, to £1,354 in the 12 months to September 2025, down from 5.7% in the 12 months to August.
➡️ https://t.co/mUorDH4by0 pic.twitter.com/tapu6y7175
Commenting on the UK House Price Index, Nathan Emerson (pictured top left), chief executive of industry body Propertymark, said: “Despite an economy that continues to throw challenges, especially to those on the housing ladder, it is positive to see people witness growth in their equity when looking at property.
“Consumers have battled a very unfavourable combination of high inflation and interest rates over the last few years, and there remain potential uncertainties ahead in many cases.”
Jeremy Leaf (pictured top right), north London estate agent and a former RICS residential chairman, however pointed out that while the ONS report is the most comprehensive of all house price indices as it covers mortgage and cash transaction, the data is a little dated.
“As a result, the numbers do not reflect the impact of intense Budget speculation on what has been happening ‘on the ground’ over the past month,” he said. “Buyers and sellers know more financial pain is coming, but don’t know where or how much which is freezing decision making for some.
“Fortunately, the underlying basics remain relatively strong for the housing market i.e. wages rising faster than house prices, mortgage rates and inflation steady, so prices are not correcting and the overwhelming majority of agreed sales are holding together, despite some looking a little shaky. The one missing gradient is confidence which will probably only change when tax changes are ruled out - or in.”
Meanwhile, the ONS, in its Price Index of Private Rents report, also showed that rental prices continued to climb. The average UK monthly private rent reached £1,354 in September 2025, an annual increase of 5.5%, though this was slightly lower than the 5.7% rise recorded in August.
In England, average rents rose to £1,410 (5.5%), while Wales saw rents reach £815 (7.1%) and Scotland £1,004 (3.4%). In Northern Ireland, the average monthly rent was £865 (7.1%) in the year to July. Within England, the North East experienced the highest annual rental inflation at 9.1%, while Yorkshire and The Humber had the lowest at 3.8%.
“With the average income needed to rent a home across the UK now reaching £45,420 and £1,514 being the typical rental price, it is clear that there are challenges which need addressing, in terms of simply not having enough supply of rental properties available to meet current demand levels,” Emerson said.
“We are about to witness some of the biggest evolutions in over 30 years within the rental sector, with the Renters’ Rights Bill across England and the Housing (Scotland) Bill. Both will make fundamental changes to how landlords operate and are aimed at strengthening consumer rights concerning standards. Across the forthcoming decade, it is essential that all eyes are turned to encouraging long-term investment in the rental sector to keep up with increased demand and population growth.”
“We are still well short of the rental stock needed, and without clear, practical measures to boost supply, that imbalance will keep rents under pressure,” said Alex Upton (pictured top centre), managing director of specialist mortgages and bridging finance at Hampshire Trust Bank. “The market doesn’t need short-term signals or headline policies; it needs delivery.
“Speculation around Stamp Duty reform is another factor weighing on activity, with some landlords holding back while they wait for more certainty. But for professional investors who understand the long-term opportunity in property, this is a time for measured planning. They are investing in the right properties, managing their portfolios carefully and preparing for what comes next.
“This is where brokers and lenders have a real role to play. Strategic support and well-structured funding can make all the difference to landlords navigating this next phase. The market always rewards those who stay focused and think long term.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
