UK house price growth remained subdued in July as economic uncertainty and concerns over interest rates continued to weigh on buyer confidence during what is usually one of the busiest periods for the housing market.
According to Nationwide, average house prices increased by just 0.1% compared with the previous month, with annual price growth slowing to 1.8% from 2.2% in June.
The average UK property price reached £277,542 in July, only slightly higher than the £277,484 recorded in June. However, prices remain below May’s average, when typical property values briefly exceeded £278,000.
Economic Uncertainty Weighs on Buyer Confidence
Nationwide’s chief economist Robert Gardner said ongoing geopolitical tensions, particularly the conflict involving Iran and the US, had created further uncertainty for financial markets.
He explained that energy prices and expectations around future Bank Rate decisions had become more volatile, making it harder for buyers to predict future borrowing costs.
The Bank of England recently kept interest rates unchanged at 3.75%, although it warned that a worsening Middle East conflict could push inflation higher again next year, increasing pressure on household finances.
With mortgage affordability already a major concern for many buyers, uncertainty around interest rates has encouraged some people to delay moving decisions.
Housebuilders Face Challenging Conditions
The slowdown in demand has also affected major housebuilders, with Taylor Wimpey warning of difficult market conditions as it reported its latest financial results.
The company said weaker buyer demand, combined with rising construction costs, had created additional pressure on the business. It now expects to complete between 10,600 and 10,800 homes this year, placing it at the lower end of its previous forecast.
Shares in Taylor Wimpey fell by almost 6% following the announcement.
Estate agents have also reported a more cautious market, with buyers taking longer to commit and sellers adjusting their expectations.
Amy Reynolds, head of sales at London estate agency Antony Roberts, said prices in many areas had remained largely unchanged, with realistic offers being accepted.
She noted that while there are currently more sellers than buyers, many homeowners are responding by reducing asking prices rather than rushing to sell.
Homeowners Staying Put for Longer
Separate government figures show that homeowners are increasingly staying in their properties for longer, particularly those who own their homes outright.
Data from the English Housing Survey shows that outright homeowners have lived in their current property for nearly 24 years on average, with around one-third remaining in the same home for 30 years or more.
Nationwide suggested this trend may partly reflect an ageing population, with more people moving into outright ownership after paying off their mortgages.
By comparison, homeowners with mortgages have typically stayed in their homes for around nine years, while private renters have the shortest average occupancy period at approximately four and a half years.
Despite longer ownership periods, movement between housing sectors remains significant. Nationwide said almost 200,000 households moved from the private rented sector into home ownership during 2024/25, although around 100,000 former homeowners also moved back into rented accommodation.
Mortgage Market Shows Signs of Resilience
Despite wider uncertainty, mortgage activity has remained relatively steady.
NatWest Group reported a rise in mortgage balances during the second quarter, as some homeowners rushed to secure deals following increased concerns over borrowing costs.
NatWest chief executive Paul Thwaite said mortgage demand had been strong earlier in the year, before activity became more volatile following developments in the Middle East.
He added that mortgage applications later returned to more normal levels and expressed hope that confidence would improve as there is greater clarity around global events and future economic policy.
Although the housing market has remained resilient, July’s figures highlight the challenges facing buyers and sellers as affordability pressures and interest rate uncertainty continue to shape the UK property market.
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