Sep 18, 2025, 5:52 AM
Sep 17, 2025, 12:00 AM

UK house price growth slows amid economic pressures

Highlights
  • The annual UK house price growth rate decreased to 2.1% in June 2025 from 3.5% in May.
  • Northern Ireland topped the regions with a 9.7% increase in property prices, while the South East only saw 1.2% growth.
  • A stable housing market is suggested despite economic pressures, with a potential future boost expected from interest rate cuts.
Story

In June 2025, the annual rate of house price growth in the UK decreased to 2.1%, down from 3.5% in the previous month. This decline indicates a cooling market following significant changes to stamp duty that were introduced in April 2025. The South East of England experienced particularly slow growth at just 1.2%, contrasting sharply with the North East, which saw a notable increase of 7.9%. The overall number of homes for sale in the UK rose by 10% compared to the previous year, influenced by greater market stability and increased sales activity. Regionally, Northern Ireland led with the highest annual property price inflation at 9.7%. Strong performance was also noted in Scotland and the North East, which reported annual rises of 4.7% and 4.8% respectively. The demand for housing seems more vigorous than during the same period in 2024, as evidenced by the 8% year-on-year increase in sales agreed. Experts believe that these figures suggest a steadying market, even with extensive economic challenges affecting buyer affordability and behavior. Additionally, leading mortgage officials have warned of a potential slowdown as the current conditions may hinder long-term market growth. Despite the improvements in supply and a stabilizing sales environment, the overall economic outlook remains bleak. Investors continue to be concerned as economic growth remains tepid and inflationary pressures linger. The impact of anticipated interest rate cuts may further energize the buyer's market if they come to fruition, leading to a more dynamic environment for transactions in the latter half of the year. In the construction and renovation sectors, a stable housing market generally invites more investor confidence as it ensures continuity in the demand for materials and services. Analysts continue to monitor interest rates while foreseeing that any further reductions could contribute to easing mortgage pressures for consumers, making housing more accessible to a broader demographic. The situation is being watched closely, as it is intrinsically linked to the broader UK economy, which many fear is entering a challenging period marked by low growth and high inflation. This nexus is essential in understanding how future economic policies will shape the housing landscape moving forward.

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