Average home costs rose for the third consecutive month in August, rising by 0.3% in comparison with July to succeed in £299,331, the newest Halifax index exhibits.
Although this marked a brand new document excessive, the tempo of annual progress was 2.2%, down barely from 2.5% in July.
Northern Ireland continues to see the strongest annual progress with common costs up by 8.1% over the yr to £217,082.
In Scotland, common costs rose by 4.9% in August to £215,594 and in Wales they elevated by 1.6% to £227,786.
In England, the North/South divide continues, because the North East, North West, and Yorkshire & the Humber all noticed costs rise by greater than 4%.
But the South West noticed costs fall 0.8% over the previous yr, making it the primary UK area to document since July 2024.
In London the typical home value ticked up by 0.8% year-on-year to £541,615.
Across the UK as an entire, the typical paid by first-time patrons has edged down by 0.6% since May to £237,577 as mortgage affordability has improved.
On a 95% LTV mortgage over 30 years, that would imply month-to-month repayments of round £1,179 in comparison with the typical UK non-public hire of £1,343, in accordance with Halifax.
The lender’s head of mortgages Amanda Bryden says: “The story of the housing market in 2025 has been considered one of stability.
“Since January, costs have risen by lower than £600, underlining how regular the market has been regardless of wider financial pressures.
“Affordability stays a problem, however there are indicators of enchancment. “Interest charges have been on a gradual downward path for almost two years, and lots of the best fixed-rate mortgage offers now provide charges under 4%.
“Combined with robust wage progress – which has outpaced home value inflation for almost three years – that is giving extra potential patrons the arrogance to take the subsequent step.
“Summer is usually a quieter interval for the market, so the latest rise in mortgage approvals to a six-month excessive is an encouraging signal of underlying demand.
“While the broader financial image stays unsure, the housing market has proven over latest years that it could possibly take these challenges in its stride.
“Supported by enhancing affordability and resilient demand, we anticipate to see a gradual however regular climb in property costs via the remainder of this yr.”
Market response
OnTheMarket president Jason Tebb says: “While costs have risen once more, they’re being stored in examine to an extent by affordability considerations, regardless of 5 interest-rate reductions previously yr.
“Overall, the housing market is regular, though with elevated ranges of recent directions, longer transaction occasions and extra competitors for patrons, sellers ought to have real looking expectations in the event that they want to transfer earlier than the top of the yr.”
“Most appear to take the view that any change is not going to occur instantly and if cost duty is switched to sellers, this should be taken into consideration by greater costs with exercise presumably surging if little or no change is made.”
SPF Private Clients chief government Mark Harris, says: “With the Budget now due on the finish of November, if rumours and hypothesis as to what it could comprise proceed to flow into, this gained’t assist patrons and sellers decide to large choices corresponding to shifting.
“Swap charges, which closely affect the fixed-rate mortgage market, proceed to rise as cash market expectations of the place rates of interest are heading have modified amid considerations over inflation.
“This market uncertainty may lead to short-term will increase at the least in mortgage charges, with some lenders together with Nationwide beginning to nudge their pricing upwards in latest days.”
Bestinvest by Evelyn Partners private finance analyst Alice Haine says: “Recent surges in long-term bond yields – pushed by investor unease over the state of the general public funds and world financial and geopolitical considerations – may have implications for mortgages.
“A sustained rise in long-term borrowing prices runs the chance of pushing up mortgage charges – one thing that will hamper affordability ranges simply on the level that the market was beginning to get better.
“Andrew Bailey, Governor of the Bank of England, has solid doubt on the chance of imminent rate of interest cuts, citing persistent inflation.
“This aligns with market expectations that there can be no additional fee cuts this yr – a blow for debtors hoping for additional respite from excessive mortgage repayments.”
Haine says that the announcement that the Autumn Statement will fall a month later than final yr, on November 26, is fuelling hypothesis about what property tax reforms may be on the playing cards.
She provides: “Rumours already touted embrace the opportunity of a brand new gross sales levy to switch stamp responsibility on houses over £500,000, capital beneficial properties tax on the sale of high-value residences, council tax reform and National Insurance on rental revenue for landlords.
“The uncertainty round what may transpire is already prompting some patrons to tug out of offers simply weeks after placing in gives, brokers report.”
