After a quiet summer, the UK housing market is showing signs of stability, even if growth remains modest. The latest house price indices from Halifax and Nationwide both highlight a market which is holding steady, but with some clear differences depending on where in the country you look.
The latest Halifax figures report that average UK house prices rose by 0.3% in August, marking the third monthly increase in a row. That means the typical property is now valued at £299,331 which is a new record high. Annual growth, however, eased slightly to 2.2%, down from 2.5% in July 2025.
Northern Ireland continues to lead the pack, with values increased by over 8% in the past year, while Scotland and the North East also remain strong performers at over 4% average annual growth. By contrast, the South West has seen prices soften by nearly 1% in the past 12 months, underlining the ‘North South divide’ that has opened up across England. London unsurprisingly remains the most expensive market at more than £540,000 on average, however annual growth is running at less than 1%.
First time buyers may find some encouragement in the figures, with the Halifax noting that while overall prices edged higher, the average cost of a first home actually dipped slightly over the summer. The typical first time buyer property now stands at £237,577. This means that on a 95% mortgage over a 30 year term, repayments could potentially sit at approximately £1,179 per month. This compares favourably with the average UK rent of £1,343, making buying a home potentially cheaper than renting in many areas.
Meanwhile, the Nationwide’s latest index told a similar but slightly cooler story, reporting that annual house price growth slowed in August which suggested that the market had slightly lost momentum. The overall picture, however, still points to steady conditions rather than any dramatic shift.
With both the Nationwide and Halifax indices broadly aligned, the key takeaway as we move into September is that property values are currently holding up, even if growth is softer than earlier in the year.
In August the Bank of England’s Monetary Policy Committee voted to hold interest rates. While this decision might have reassured borrowers, some lenders moved in the opposite direction and nudged fixed rates up slightly.
Hina Bhudia, partner at Knight Frank Finance, summed up the shift by saying, “We saw a handful of lenders edge fixed rates up after the Bank of England’s split decision last month and the stronger-than-expected wage growth that followed. What began as a marginal adjustment has now become a broader market move. Nationwide’s decision this morning to raise fixed rates by up to 0.2% marks a turning point, because they are typically the cheapest on the high street, and when they reprice, others tend to follow.
Bhudia continued, “Virgin, Halifax and BM Solutions have also raised fixed rates, showing that momentum is building. The increases may only be a few tenths of a percentage point, but for borrowers that translates into a meaningful rise in monthly payments and will weigh further on sentiment already under strain from reports of tax hikes and likely changes to property taxation.”
For many households, even small changes in mortgage rates can have a big impact on affordability, especially as living costs remain high.
As we move into September, the political landscape is also shifting. Steve Reed OBE has been appointed Housing Secretary, replacing Angela Rayner after her resignation. One of his first tasks will be to oversee the final stages of the Renter’s Rights Bill, which is widely expected to receive Royal Assent before the end of September. If passed, the Bill will introduce new protections for tenants and could significantly reshape parts of the UK private rental sector.
Meanwhile, attention is turning to the Autumn Budget, which has now been confirmed for Wednesday 26th November. Reports suggest the Chancellor is weighing up reforms to Stamp Duty and may even consider introducing Capital Gains tax on main residence sales. While no decisions have yet been announced, even the possibility of such changes is enough to create some uncertainty for buyers and sellers alike.
As a result, overall the market is currently in a holding pattern. Prices are edging higher, demand remains steady and with the number of properties currently for sale still at their highest numbers in over a decade, there is plenty of choice for buyers who are happy to continue with their plans over the next few months. However, higher borrowing costs and the potential risk of new property taxes mean that some movers, particularly in London and the South East, where any changes if introduced are likely to be more evident due to higher average property values, mean that confidence may remain fragile for now.
For first time buyers, the current environment may still offer opportunities, as mortgage approval figures sit at a six-month high and rents remain expensive, meaning that stepping onto the property ladder may make financial sense. For sellers, the message is one of realism and patience. Setting a realistic asking price will be key to securing a sale in the months ahead.
The housing market has shown resilience many times over the past decade, and 2025 is proving to be no different. Prices are broadly stable, as is demand. However, the autumn could see change in this picture, due to potentially rising mortgage rates, further political changes and the looming Autumn Budget, all of which could shift confidence and market sentiment.