Experts have reacted to the latest figures
Nationwide has issued a new update this morning.
It said annual house price growth slowed to 1.8% in July as property experts warned that “the market is crying out for some kind of incentive”. UK house price growth was down to 1.8% in July, from 2.2% in June, Nationwide’s HPI says.
House prices were up just 0.1% month on month to £277,542 from £277,484. This comes as the Bank of England chose to hold its base rate at 3.75% yesterday in a move that will do nothing to cool rising mortgage rates due to the war in Iran and skyrocketing oil prices.
Property experts and brokers said these figures did not take into account local areas – for example house prices are rising in the north, but going down in the south. They said they were seeing this slowdown in the amount of business enquiries they were getting and said the market was “adjusting” to higher borrowing costs. They urged new Prime Minister Andy Burnham to offer some kind of incentive to get the market moving.
Robert Gardner, Nationwide’s chief economist, said: “Market activity and house prices have remained soft in recent months, in part reflecting the uncertain economic backdrop. 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.
“Despite the ongoing risks from the latest energy price shock, the Monetary Policy Committee can take some comfort from the fact that consumer price inflation declined further in June. 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.”
Chris Barry, director of London-based Thomas Legal, said he was seeing fewer new enquiries in his business.
He added: “Today’s data comes as no surprise as the number of new enquiries have been dropping month on month since the spring. Stock levels are now at a 12-year high and serious buyers aren’t registering their interest in the numbers they had earlier in the year. The market is crying out for some kind of incentive but the Prime Minister has all but ruled anything out in the next Budget.”
Stephen Perkins, managing director of Norwich-based Yellow Brick Mortgages, said the market was slow currently.
He added: “The housing market hasn’t stalled, it’s become more selective. Buyers are still moving, but they’re taking longer, negotiating harder and thinking more carefully before committing. Slower house price growth reflects a market adjusting to higher borrowing costs, not one falling off a cliff. Unless mortgage rates fall meaningfully, I’d expect house price growth to remain small over the coming months rather than seeing any dramatic moves in either direction.”
Jamie Elvin, director of London-based Strive Mortgages, said the market was not weakening.
He added: “While the slowdown in annual house price growth will make headlines, it reinforces the picture of a market that’s stabilising rather than weakening. Affordability pressures and interest rate uncertainty continue to keep buyers cautious, but easing inflation and the prospect of lower borrowing costs should support confidence. I expect modest price growth over the coming months, with well-priced properties in strong locations continuing to outperform.”
Patricia Ogunfeibo, founder and non-practising solicitor at London-based tenant2owner, said it was not an issue for homeowners if prices go up or down.
She added: “If prices rise and you move, you pay more for your next home, unless you are downsizing. If trading up, a rising market actually widens the gap you have to bridge. If prices fall, you get less for yours, but you also pay less for the next one, and that gap narrows unless you’re in negative equity.
“That stings, because it limits your ability to borrow more, to remortgage on decent terms, or to sell without bringing cash to the table. Don’t treat your home as an investment. See it for what it is; a secure, safe space. If you do, and keep paying your mortgage you’ll always win, whether house prices go up or down.”
Evren Ergin, founder and developer at ValuQ, said the South and London were seeing prices fall.
He added: “1.8% is a real number that describes almost nobody. It is the average of a market moving in two directions at once. We analysed 1.3 million second-hand house sales registered with HM Land Registry in 2024 and 2025. Median family home prices fell in 53 local authorities. Every one of them was in London, the South, the Midlands or Wales.
“Every northern authority in the study rose. Elmbridge lost £35,000 on the median house, in a year the national figure was positive. That is what a slowdown looks like on the ground. Not everything easing gently by a fraction, but some places carrying the fall and others carrying the growth, with one number in the middle telling both of them they are average.
“For the next few months the figure that matters to a seller is not annual growth. It is the gap between what they ask and what they get. In a market growing at 1.8% a year, an asking price 5% too high is not ambitious. It is a house that does not sell.”
Graham Nicoll, financial planner, Chartered FCSI at NCL Wealth Partners, said the market was steady.
He added: “A 0.1% monthly movement or a slight change in the annual growth rate makes for a headline, but it tells us very little about the underlying health of the housing market. We have become obsessed with analysing every tenth of a percent when property is a long-term asset, not a month-by-month trading market.
“The figures suggest a market that is steady rather than strong. Buyers remain cautious, affordability is still stretched and uncertainty around interest rates continues to influence confidence, but we’re not seeing signs of a sharp correction either. As for predictions, I’d be wary of anyone claiming to know what the next few months will bring. Inflation, interest rates and global events can all shift sentiment quickly.
“The more important trend is that, provided borrowing costs continue to stabilise and employment remains resilient, the housing market is likely to continue its gradual, rather than dramatic, path forward.”
