Average home prices rose for the third consecutive month in August, rising by 0.3% in comparison with July to achieve £299,331, the newest Halifax index exhibits.
Although this marked a new file excessive, the tempo of annual development was 2.2%, down barely from 2.5% in July.
Northern Ireland continues to see the strongest annual development with common prices up by 8.1% over the yr to £217,082.
In Scotland, common prices 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 prices rise by greater than 4%.
But the South West noticed prices fall 0.8% over the previous yr, making it the primary UK area to file since July 2024.
In London the common home value ticked up by 0.8% year-on-year to £541,615.
Across the UK as a entire, the common 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 common UK non-public lease of £1,343, based on Halifax.
The lender’s head of mortgages Amanda Bryden says: “The story of the housing market in 2025 has been one among stability.
“Since January, prices 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 most of the best fixed-rate mortgage offers now provide charges under 4%.
“Combined with robust wage development – which has outpaced home value inflation for almost three years – that is giving extra potential patrons the arrogance to take the following step.
“Summer is often a quieter interval for the market, so the current 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 current years that it might take these challenges in its stride.
“Supported by bettering affordability and resilient demand, we count on to see a sluggish however regular climb in property prices by means of the remainder of this yr.”
Market response
OnTheMarket president Jason Tebb says: “While prices have risen once more, they’re being saved in examine to an extent by affordability considerations, regardless of 5 interest-rate reductions in the previous yr.
“Overall, the housing market is regular, though with elevated ranges of recent directions, longer transaction instances and extra competitors for patrons, sellers ought to have sensible 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 won’t occur instantly and if cost duty is switched to sellers, this must be taken into consideration by greater prices with exercise presumably surging if little or no change is made.”
SPF Private Clients chief govt 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 massive choices comparable to transferring.
“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 end result in short-term will increase no less than in mortgage charges, with some lenders together with Nationwide beginning to nudge their pricing upwards in current 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 international financial and geopolitical considerations – may have implications for mortgages.
“A sustained rise in long-term borrowing prices runs the danger of pushing up mortgage charges – one thing that might hamper affordability ranges simply on the level that the market was beginning to recuperate.
“Andrew Bailey, Governor of the Bank of England, has forged doubt on the chance of imminent rate of interest cuts, citing persistent inflation.
“This aligns with market expectations that there shall be no additional charge 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 could be on the playing cards.
She provides: “Rumours already touted embrace the opportunity of a new gross sales levy to exchange stamp responsibility on houses over £500,000, capital positive factors tax on the sale of high-value residences, council tax reform and National Insurance on rental earnings for landlords.
“The uncertainty round what may transpire is already prompting some patrons to tug out of offers simply weeks after placing in affords, brokers report.”
