Nationwide Building Society’s July house price index shows UK prices up just 0.1% month-on-month, with annual growth slowing from 2.2% in June to 1.8%. The average home now costs £277,542. Robert Gardner, Nationwide’s chief economist, said prices were broadly flat after seasonal adjustment, with market activity and prices soft in recent months, partly reflecting an uncertain economic backdrop — geopolitical tensions remain high, with the Iran-US conflict again pushing up energy prices and market interest rates.
Tom Bill, head of UK residential research at Knight Frank, put the near-term causes down to two factors: higher mortgage costs and uncertainty around property taxation — “a combination [that] has kept demand in check this summer.” He noted the market continues to guess at tax changes in the Budget, with the Prime Minister repeating the line about “difficult decisions.”
Zoopla’s five-year analysis, released the same day, provides the long lens: between June 2021 and June 2026 the average UK home gained 15.3% in value, or £36,100, and prices have risen in 25 of the last 30 years. But the same analysis, tracking 32 million homes, found fewer than 1 in 7 (14%) recorded a value increase in every one of the past five years — with the era of ultra-low mortgage rates over, an automatic annual rise is no longer a safe default.
Knight Frank’s outlook: although the Bank of England has turned more hawkish, holding rates still appears the most likely path for the second half of the year.
References
Property118 — UK house price growth slows to 1.8%
Zoopla — The average home has increased 15.3% in value since 2021
