UK Housing Market Summary August 2025

The UK housing market is showing tentative signs of stabilization. According to the Office for National Statistics, annual house price inflation accelerated in June 2025 to 3.7%, up from 2.7% in May, with the average property price hitting £269,000 Financial Times. The Bank of England’s recent interest rate cuts to 4%, along with the waning effects of April’s stamp duty adjustments, have supported this upward movement Financial Times. Meanwhile, July’s private rental inflation cooled slightly to 5.9%, though regional disparities persisted—London rents rose 6.3% to an average of £2,250, while the North‑East saw the fastest growth at 8.9%, albeit from a lower base of £736.

House price growth remains modest, prompting market forecasters like Savills, Rightmove, and Zoopla to scale back their projections for 2025 to 1–2%, reflecting a sluggish momentum despite improving sales activity MoneyWeek. Inventory levels remain elevated, especially in southern regions, which is tempering seller pricing power and keeping the market balanced MoneyWeek. Nevertheless, July emerged as the busiest month for transactions since 2020, and mortgage approvals are edging closer to pre‑pandemic levels—a sign of buyer confidence gaining ground MoneyWeek.

Sources FT and Money Week