The average cost of a home in the UK has climbed to £269,000, according to newly published figures, marking a 3.7% rise over the past year.
This increase means buyers are now paying around £9,000 more for a property than they were a year earlier, based on the latest UK House Price Index from the Office for National Statistics (ONS) and Land & Property Services in Northern Ireland.
On a month-to-month basis, the figures also showed that property prices rose by 1.4% between May and June. This is notably higher than the 0.4% rise recorded during the same period in 2023.
When looking at regional data, the North East of England saw the sharpest increase in house prices. Properties in the area rose by 7.8% over the year, taking the average cost of a home there to £163,679.
London, however, saw far slower growth. The average price of a property in the capital increased by just 0.8% in the year to June, reaching £561,309. This was only a slight improvement on May, when growth stood at 0.6%.
Commenting on the figures, Jonathan Hopper, Chief Executive of Garrington Property Finders, said that after a slowdown in the market following the end of the stamp duty holiday, house price growth has returned strongly.
He noted that while the national jump in inflation looks significant, the pace of growth differs greatly depending on the region. In some parts of northern England, prices are accelerating at almost ten times the rate seen in London.
Hopper added that Scotland and Northern Ireland are also seeing stronger price growth compared to the more modest increases recorded in the South of England.
He described the current market as one where negotiations between buyers and sellers feel less combative than before, with both sides showing more willingness to strike deals.
However, affordability challenges remain an issue, particularly in the south of the country. Higher property values combined with elevated borrowing costs continue to put pressure on first-time buyers and investors.
The market is also showing clear signs of changing demand. Families looking to upsize are more active, whereas demand for flats remains weaker, reflecting shifting housing needs as well as the impact of mortgage costs.
Additional data from Rightmove this week highlighted further adjustments in asking prices. The property website reported that the average asking price of newly listed homes fell by 1.3% in August, dropping £4,969 to £368,740.
Over the past three months, sellers have cut more than £10,000 from initial asking prices on average, in an attempt to attract buyers who have become more price-conscious in the current climate.
Meanwhile, the rental market remains under pressure. Separate figures from the ONS showed that private rents rose by 5.9% in the year to July, with the average monthly rent now standing at £1,343. Although this is slightly lower than the 6.7% annual rise reported in June, rental affordability remains a concern.
Nathan Emerson, Chief Executive of Propertymark, stressed that with new legislation such as the Renters’ Rights Bill in England and the Housing (Scotland) Bill approaching, the rental market is on the verge of major change. He warned that demand continues to outstrip supply, with an average of six tenants competing for each available property, underlining the urgent need for more long-term investment in the rental sector.
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