Annual house price growth slowed in August, with London the only English region to see a decline in property values, according to the latest data from the Office for National Statistics (ONS).
The ONS reported that the annual growth rate in house prices fell to 3.0% in August, down from 3.2% in July.
Average prices in the 12 months to August 2025 rose to £296,000 in England, reflecting 2.9% growth; £211,000 in Wales (2% growth); and £194,000 in Scotland (4% growth).
Northern Ireland saw the strongest growth, with the average house price reaching £185,000 in the second quarter of 2025, up 5.5% year-on-year.
Within England, the North East recorded the highest annual house price increase at 6.6%, while London experienced a 0.3% fall in average prices over the same period.
Rents
Meanwhile, 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.
Industry reaction:
Nick Leeming, Chairman of Jackson-Stops, comments: “Today’s figures reflect a slower market, with only a moderate monthly increase of 0.8% compared to the 1.5% noted this time last year. The weaker rate of growth reflects pre-budget nerves across the industry alongside a decade-high level of property for sale softening sellers’ pricing power.
“Yet annual house prices have remained steady in August at 3% close to last year’s 2.8%, showing that demand and supply fundamentals continue to underpin momentum. Policy speculation will continue to cloud the outlook until the Budget is announced, with October’s HPI data release – due in December – poised to reveal the impact of buyer hesitancy and whether the usual Autumn bounce takes shape.
“Jackson-Stops’ own national data points to a cooling market, where despite market appraisals and listings increasing in September year-on-year, viewings and applicants remain stable but subdued, reflecting wider caution among buyers of higher valued property in the run up to the budget. That being said, regional disparities are becoming more pronounced, with upticks in monthly buying enquiries reported in Alderley Edge, Exeter, and Northampton. Chester and Cornwall top the charts seeing a near 70% surge in buyer enquiries respectively this month, pointing to specific lifestyle-driven demand.
“Looking ahead, it’s clear the government must tread carefully with a property market vulnerable to external shocks. Tax reform must be designed to reduce friction whilst keeping prices stable, in which unexpected consequences are factored into current thinking. The reality is that many homeowners are asset-rich but cash-poor. Policies that stifle transactions or deter investment risk reverberating far beyond the housing sector.”
Amy Reynolds, head of sales at Antony Roberts: “House-price growth is showing further signs of flattening, which may reinforce the current market caution leading to more sellers adjusting their expectations as to what they can achieve for their homes.
“A sudden drop in prices is not expected as mortgage rates remain relatively low and many have plenty of equity in their homes and stable jobs. Well-priced, well-located homes continue to perform.
“Affordability remains the brake on the housing market. The high cost of buying a new home is prohibiting many from making the moves they want to make, as they don’t feel confident enough to do so, and this is leading to some stagnation in the market in certain areas.”
Richard Donnell, executive director of research at Zoopla: “House price inflation is slowing, but strong demand from first time buyers is keeping this measure of price inflation higher than other measures. Budget uncertainty is leading to a slowdown in sales and demand which will drive a continued slowdown in house price inflation. The increase in first time buyers activity is one reason rental inflation has slowed to the lowest level in almost three years, alongside a 20% increase in the number of homes for rent and growing affordability pressures on renters.”
Iain McKenzie, CEO of The Guild of Property Professionals: “The ONS figures showing a 3% annual increase in average UK house prices underline the market’s remarkable resilience in the face of economic headwinds. While growth has eased slightly from July’s 3.2%, the data reflects a market that has found a new, more stable footing.
“The combination of lower mortgage rates, a wider choice of homes, and price growth running below wage increases is supporting buyer confidence and helping sustain healthy transaction levels. Crucially, we’re seeing realistic pricing become a key differentiator: homes priced sensibly are selling, while those that need price reductions are taking three times as long to secure a buyer.
“The record volume of properties for sale and the largest sales pipeline in over four years point to an active final quarter. While geopolitical uncertainty and the upcoming Autumn Budget may cause some to pause, overall market fundamentals remain sound.
“Looking ahead, we expect house price growth to remain steady through the end of the year, with firmer momentum building into 2026 as wage growth and more flexible lending criteria feed through. This is good news for both movers and first-time buyers – a balanced market benefits everyone.”
Read the orginal article: https://propertyindustryeye.com/house-price-growth-slows-as-rents-soften-industry-reaction/
