Annual growth in the average UK house price accelerated to 2.2% in June, up from 1.7% in May, according to Nationwide Building Society. The average UK house price in June stood at £277,484, with prices broadly flat month-on-month after seasonal adjustments.
Market Softens Amid Economic Uncertainty
Robert Gardner, Nationwide’s chief economist, attributed the recent softening of the housing market to geopolitical tensions and rising energy costs. “It is not surprising that the market has softened a little in recent months, given the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates,” he said. He noted that consumer confidence and housing sentiment have weakened, and mortgage approvals fell noticeably in May.
However, Gardner pointed to positive signs: “If the energy shock continues to subside, the Bank of England may not need to raise interest rates, or at least by less than had previously been anticipated – a view reinforced by the fact that UK inflation has also been lower than expected in recent months.”
Fixed-Rate Mortgage Pricing Improves
A shift in market expectations for the future path of the Bank of England base rate has helped bring down the market interest rates that underpin fixed-rate mortgage pricing. “If maintained, these trends will help to restore household confidence and ease affordability constraints, paving the way for a recovery in housing market activity in the coming quarters,” Gardner added.
Despite these positive developments, some industry experts remain cautious. Amy Reynolds, head of sales at London-based estate agency Antony Roberts, described the current market as “steady and selective rather than booming or stalling,” noting a pre-summer push from families wanting to settle before the new school year.
Buyers Remain Cautious
Ian Futcher, financial planner at wealth manager Quilter, said: “Many prospective buyers are continuing to delay making any major financial commitments. Confidence remains fragile and, after a lengthy period of fluctuating mortgage rates, households are understandably reluctant to make a move until there is greater certainty over borrowing costs and the wider economic outlook.”
Regional House Price Variations
Nationwide also provided average house prices for the second quarter of 2025 across UK regions, with Northern Ireland seeing the strongest annual growth at 8.6%, followed by the North West and North East at 3.9%. London recorded the highest average price at £540,903 but only 1.6% annual growth. The Outer South East region saw the weakest growth at 0.1%.
Regional averages include: Northern Ireland £226,699 (8.6%), North West £231,415 (3.9%), North East £173,756 (3.9%), Scotland £195,928 (3.5%), Wales £220,337 (3.5%), West Midlands £256,592 (3.2%), Yorkshire and the Humber £217,518 (2.9%), East Midlands £240,482 (1.8%), London £540,903 (1.6%), South West £310,429 (0.7%), East Anglia £274,375 (0.3%), Outer Metropolitan £432,173 (0.3%), and Outer South East £341,175 (0.1%).
