New figures from two of the UK’s biggest lenders suggest that property values across the UK have edged up in July, with more homes changing hands and affordability showing signs of slight improvement.
The Bank of England’s decision on 7 August to reduce the base rate to 4%, part of a steady easing cycle that began in mid-2024, is also expected to support continued market stability in the coming months.
According to the latest Halifax House Price Index, the average UK property rose in value by 0.4% in July to £298,237, marking the strongest monthly rise so far this year. Annual growth now stands at 2.4%, down slightly from 2.7% in June.
Amanda Bryden, Head of Mortgages at Halifax commented, “UK house prices rose in July, the biggest monthly increase since the start of this year. The housing market continues to show resilience, with activity levels holding up well. We expect house prices to follow a steady path of modest gains through the rest of the year.”
Regional growth remains varied. Northern Ireland leads the UK with an annual price increase of 9.3%, while Scotland and parts of Northern England (the Northwest and Yorkshire and Humber) also saw strong year-on-year gains of 4 to 4.7%.
Meanwhile, the Nationwide House Price Index also reports a modest increase in values, with prices rising by 0.6% month-on-month in July. Annual growth similarly sits at 2.4%, with the average house price now at £272,664.
Robert Gardner, Nationwide’s Chief Economist observed, “Housing affordability has been steadily improving, thanks to a period of strong income growth alongside more subdued house price growth and a modest fallback in mortgage rates.”
He added that the UK’s house price to earnings ratio has now fallen to around 5.75, its lowest level in over a decade, and well below the 6.9 peak recorded in 2022. The typical five-year fixed rate mortgage for buyers with a 25% deposit is now around 4.3%, offering more manageable repayment levels for many households.
Confidence in the housing market is also reflected in the latest HMRC transaction figures, which show that more homes are changing hands. In June 2025, there 95,530 seasonally adjusted residential transactions, reflecting an increase of 13% from May, and 1% when compared with June 2024.
While sales volumes are still below pre-pandemic highs, they suggest a return to more typical seasonal trends following the surge in activity earlier this year, which was driven by first time buyers aiming to beat the changes in Stamp Duty from April.
However, market expectations have shifted slightly. Savills revised its 2025 UK house price forecast, reducing its prediction for annual growth from 4% to just 1%. The firm cited a “slower than expected recovery in buyer activity” despite improving affordability and the likelihood of further interest rate cuts.
The most significant change in the economic backdrop came on 7th August, when the Bank of England announced a reduction to the base rate, taking it from 4.25% to 4%. This move is part of a steady easing cycle that began in 2024, signalling continued efforts to support households and businesses against inflationary pressures.
So, what does all this mean for movers?
In short, the market is gradually becoming more balanced, as it returns to being favourable for buyers and sellers alike. More properties are now available for sale than at any point in the last decade, providing movers with more choice. Lending conditions are improving, with mortgage rates softening slightly, and the overall economic outlook is slightly more stable than it was a few months ago. For those who have been holding off making a move, the coming months could offer a good window of opportunity, especially as affordability edges upwards and sellers adopt a realistic approach to price expectations. As always, local market dynamics and individual circumstances will shape the best timing, but overall the signs point to a steadier and resilient housing marketing heading into the second half of 2025.