Annual growth eases as market activity remains subdued amid geopolitical uncertainty and volatile rate expectations
UK annual house price growth slowed to 1.8% in July, down from 2.2% in June, according to the latest data from Nationwide.
The average UK home now costs £277,542. Prices were broadly flat on a month-on-month basis after seasonal adjustment.
"Market activity and house prices have remained soft in recent months, in part reflecting the uncertain economic backdrop," said Robert Gardner, chief economist at Nationwide. "Geopolitical tensions remain high, with the conflict between Iran and the US again exerting upward pressure on energy prices and market interest rates in recent weeks. Financial market expectations for the future path of Bank Rate have been volatile, reflecting shifting views about the inflationary implications of events at home and abroad.
Gardner (pictured right) noted that despite the pressures from rising energy prices, the Monetary Policy Committee had some grounds for reassurance. "Consumer price inflation declined further in June," he said. "Signs that wage growth has continued to ease gives policymakers more breathing space to assess the extent to which tighter policy is necessary to ensure inflation returns to target."
Industry observers pointed to the latest Nationwide figures as evidence of a market seeking equilibrium. "Steady house prices reflect a housing market that continues to find balance despite ongoing economic and political change," said Nathan Emerson, chief executive of industry body Propertymark.
"A combination of constrained housing supply, changing borrowing costs and varying levels of buyer demand continues to influence market conditions, while the national figures mask significant regional variation across the UK.
"Yesterday's interest rate decision, with rates remaining unchanged, provides greater certainty for borrowers and allows prospective buyers to plan with a clearer understanding of future mortgage costs."
Emerson (pictured right) called on policymakers to match that stability with a clearer long-term housing agenda. "The next priority should be greater policy certainty," he argued. "As the new Prime Minister develops his housing agenda, clarity around taxation, housing supply and long-term reforms will help reinforce confidence across the market. Stability in policy is every bit as important as stability in interest rates."
Turning to housing tenure trends, Gardner cited findings from the English Housing Survey showing average length of residence across all tenure types has remained broadly stable since 2010/11, at approximately 14 years.
Outright owners recorded the longest tenure at close to 24 years on average, though around a third had remained in the same property for 30 years or more. Private renters recorded the shortest stays, with roughly half having lived in their current home for two years or less.
"There has been a small increase in the average residence in the private rented sector over the last decade, while those owning with a mortgage have seen a small decline," Gardner said. "The latter may be partly due to homeowners with a mortgage moving more frequently, although compositional changes may also be playing a role (for example, as the population ages and more people transition into owning outright).
"Around a quarter of those owning a home with a mortgage had been in their current home for two years or less, suggesting higher first-time buyer activity in recent years may also be a factor."
On housing market churn, Gardner highlighted that moves within tenure types dominated activity in 2024/25. Approximately three-quarters of all moves occurred within the same tenure, with moves within the private rented sector accounting for the largest single share at 640,000 — nearly double the number recorded within the owner-occupier sector.
Cross-tenure movement remained significant nonetheless. "The moves between tenure types are still significant," Gardner noted. "For example, nearly 200,000 households previously in the private rented sector became owner occupiers in 2024/25. But there is also a return flow, with around 100,000 households moving into private rented properties having previously been owner occupiers."
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