Annual UK house price growth slows as London sees average property values fall

Annual house price growth slowed in August, with London being the only English region where property values fell, according to Office for National Statistics (ONS) figures.

The annual rate of growth in property values in August was 3.0%, according to the ONS’s provisional estimate, down from 3.2% in July.

Average house prices increased to £296,000 (2.9% annual growth) in England, £211,000 (2.0%) in Wales, and £194,000 (4.0%) in Scotland, in the 12 months to August 2025.

The average house price for Northern Ireland was £185,000 in the second quarter of 2025, marking a 5.5% annual increase.

Within England, the North East had the highest annual house price inflation in August, at 6.6%. Annual house price inflation was weakest in London, with average house prices falling by 0.3%.

ONS head of housing market indices Aimee North said: “UK annual house price inflation slowed in August, with the average UK house price now around £273,000. The North East once again showed the highest annual increase and London is the only English region showing an annual fall.

“UK annual private rents inflation has eased for the ninth consecutive month, and annual growth has slowed for all countries across the UK.”

The ONS also released figures showing the average private rent in the UK was £1,354 per month in September 2025 – £70 (5.5%) higher than 12 months earlier.

Average monthly rents in England were £1,410 in September 2025, up 5.5% (£74) from a year earlier. The annual rise for England represents the 10th month in a row of slowing annual inflation, the ONS said.

In England, annual inflation in rental prices was highest in the North East (9.1%), and lowest in Yorkshire and the Humber (3.8%), in the 12 months to September.

In Wales, the average monthly rent in September was £815 – an increase of 7.1% (£55) from a year earlier.

The average monthly rent in Scotland was £1,004 in September, up by 3.4% (£33) from a year earlier. This annual rise is the lowest for more than three years and Scotland’s annual inflation rate has been generally slowing since a record-high annual rise of 11.7% in August 2023, the report said.

In Northern Ireland, the average rent was £865 in July, the ONS said. This was a 7.1% (£57) increase compared with a year earlier.

Some housing market experts said uncertainty around the autumn Budget has had an impact on sentiment.

The figures were released as the ONS said Consumer Prices Index (CPI) inflation was 3.8% in September, remaining at the same level as both July and August.

James Evans, chief executive at estate agent Douglas & Gordon, said: “Many buyers who hit pause earlier in the year are now back in the market, encouraged by more stable rates and improving affordability.

“It’s a positive sign, but we’re not out of the woods yet. Policy uncertainty ahead of the autumn Budget is already making some buyers cautious, particularly at the higher end.”

Colleen Babcock, a property expert at Rightmove, said: “A decade-high level of homes this year has limited the growth of house prices compared to last year.

“Buyers have more choice and more negotiating power, and we’re seeing more realism from sellers about the prices they can set to find a buyer amongst the competition.

“However, prices are holding up more strongly in the north of England, Wales and Scotland, where more affordable price points means that changes to stamp duty charges from April have had less of an impact.”

Stamp duty applies in England and Northern Ireland.

Ms Babcock added: “They’ve (stamp duty charges) had more of an impact in the higher-priced south of England, where there is also now some uncertainty around what the upcoming autumn Budget may contain.

“Affordability remains stretched, with mortgage rates stable but slow to come downwards, and today’s stubborn inflation figure also highlights wider affordability challenges.”

Simon Gerrard, chairman of Martyn Gerrard Estate Agents, said: “These figures from August represent sales from earlier in the year and don’t show the slowdown that set in once Budget speculation started.

“People aren’t making property decisions until there’s clarity on what new measures are coming.”

Jonathan Handford, managing director at Fine & Country, said: “Mortgage costs have eased slightly in recent weeks, which is helping sustain buyer interest and giving households more confidence to plan their next move.

“The autumn is traditionally a busier period for the market, as many buyers and sellers look to complete before Christmas or early in the new year.”

Jonathan Hopper, chief executive of Garrington Property Finders, said prices in London “are under pressure”.

He continued: “Two factors are driving these changes. Firstly the imbalance between supply and demand is giving buyers the twin luxuries of time and choice, and emboldening them to ask for – and get – price reductions.

“But we’re also seeing a two-speed market emerge among buyers. Those who need to move are pressing ahead but negotiating hard to de-risk themselves from any tax changes that may lurk in next month’s Budget.

“Meanwhile discretionary movers – especially those looking at higher price points – are adopting a wait-and-see approach. They’re unlikely to take their finger off the pause button until after the Budget, so the prime property market may remain in suspended animation until the new year.”

Jason Tebb, president of OnTheMarket, said: “While inflation was lower than expected and unchanged at 3.8%, it is still nearly double the Bank of England’s 2% target.

“With the Bank holding interest rates at 4% at its last meeting, borrowers may be disappointed that rates are not coming down faster, but the focus at least is on stability.

“Recent rate reductions have given a real boost to buyer and seller confidence and activity over the past year, although affordability still remains a challenge and is keeping property prices in check to an extent.”