UK house prices rise slowly but London sellers struggle
Professor Joe Nellis August 7th 2025
Professor Joe Nellis is economic adviser at MHA, the accountancy and advisory firm, and a co-creator of the Halifax House Price Index.
The Halifax House Price Index shows that average UK house prices rose by a modest 0.4% in July, a slight bounce back from the more muted growth recorded in June.
The housing market has entered a holding pattern, with little monthly change and limited upward momentum. However, buyer activity has improved slightly since spring, helped by more competitive mortgage deals and growing interest from the key drivers of the market — first-time buyers.
What can we expect from house price growth?
"We expect house price growth is unlikely to exceed 3% for 2025 as a whole, reflecting fragile consumer confidence and affordability pressures. This is certainly the case in London — while price growth remains stronger in regions such as Northern Ireland, Scotland and the North West of England, the South of England and London continue to underperform."
Many properties in London, particularly inner London, are actually losing value. Families looking to invest in their first owned property are being forced out of the city by high property prices and the seemingly ever-increasing cost of living. Add to this the removal of stamp duty relief for first-time buyers from April this year and it is no surprise that demand for properties in the Capital is declining, leaving sellers struggling to find buyers and prices beginning to show signs of falling.
Any cuts to interest rates by the Bank of England later this year could encourage buyers and support a recovery in transactions and pricing.
If lending conditions improve and inflationary pressures across the wider economy ease, modest house price gains may emerge in the latter part of the year, although lingering economic uncertainty may continue to undermine gains.
