UK house price growth slowed to 1.8% annually in July, a decrease from 2.2% in June, according to data from Nationwide Building Society. The average property price across the UK now stands at £277,542.
This deceleration is occurring amid elevated mortgage rates and uncertainty regarding potential tax changes affecting the housing market. Monthly prices remained flat, with industry professionals noting that buyers are negotiating harder in what is described as a buyers' market.
Robert Gardner, Nationwide’s Chief Economist, stated that market activity and house prices have remained soft, partly due to the uncertain economic backdrop. Geopolitical tensions, including the conflict between Iran and the US, have also contributed to upward pressure on energy prices and market interest rates.
Despite the Bank of England holding the base rate at 3.75% for the fifth consecutive meeting, some lenders have recently increased mortgage rates. This has added to affordability concerns for buyers.
Tom Bill, head of UK residential research at Knight Frank, highlighted that a combination of higher mortgage costs and uncertainty around property taxation has kept demand in check. Industry professionals suggest that greater policy certainty regarding the new Prime Minister’s housing agenda and more predictable borrowing costs could help rebuild buyer confidence.