Market steadies, but budget uncertainty looms
UK house prices edged up by 0.3% in August, bringing the average property value to £299,331, according to mortgage lender Halifax.
This marks the third consecutive month of price increases and sets a new record for the average UK home price, despite a slight slowdown in annual growth to 2.2%.
First-time buyers saw some relief as the average price for this group fell by 0.6% since May, now standing at £237,577. For those able to save a deposit, monthly payments on a 95% loan-to-value mortgage over 30 years could be around £1,179, which is below the current average private rent of £1,343.
Regional data from the latest Halifax House Price Index show that Northern Ireland continues to see the fastest annual growth, with prices up 8.1% year-on-year to £217,082, though this is a slowdown from the previous month. Scotland followed with a 4.9% rise to £215,594. Wales recorded a 1.6% annual increase, with average values at £227,786.
In England, the North East, North West, and Yorkshire & the Humber all posted growth above 4%. The South West, however, experienced a 0.8% annual decrease, the first region to see such a decline since Eastern England in July 2024. London remains the priciest region, with average values up 0.8% over the year to £541,615.
“The story of the housing market in 2025 has been one of stability,” said Amanda Bryden (pictured right), head of mortgages at Halifax. “Since January, prices have risen by less than £600, underlining how steady the market has been despite wider economic pressures.
“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.
“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.”
Nathan Emerson, chief executive of industry body Propertymark, however, pointed out that while the housing market is holding firm, 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,” Emerson said. “Therefore, we need to see further clarity from the UK government sooner rather than later.”
For Guy Gittins, chief executive of London estate agency Foxtons, market momentum and its underlying stability is encouraging buyers and sellers back into the fold, “albeit with a degree of caution ahead of November’s budget.”
Tomer Aboody, director at specialist lender MT Finance, echoed these sentiments, noting that “the constant uncertainty of ‘what next?’ from the Chancellor is not helping the market.”
“The property market is important to the wider economy with any further increases in tax and costs having a negative knock-on effect,” he added.
Looking ahead, Bryden said that a slow but steady climb in property prices can be expected through the rest of this year, supported by improving affordability and resilient demand.
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