UK House Prices Show Month-on-Month Increase 0.6% in July

Following a 0.9% fall in month-on-month UK house prices in June, prices grew by 0.6% in July, according to the Nationwide House Price Index.

The average UK house price increased from £271,619 in June to £272,664 in July. The end of the lower stamp duty thresholds on 31 March 2025 caused some volatility to the housing market. There was a surge of house sales pushed through before the deadline, with buyers keen to avoid the increased stamp duty thresholds.

Annual House Price Changes

The annual change in the average UK house price was a 2.4% increase in July, up from 2.1% in June.

In London, the average house price increased by 2.2% between May 2024 and May 2025. Meanwhile higher growth rates were evident in Barking and Dagenham, where average house prices increased by 8.3% over the same period, according to the latest data from the Office of National Statistics.

Lowest House Price to Earnings Ratio in 10 years

Nationwide’s Chief Economist, Robert Gardner, explained that “activity appears to be holding up well” following the increases to the stamp duty thresholds.

He also shared that the house price to earnings ratio was at the lowest in a decade:

“While the price of a typical UK home is around 5.75 times average income, this ratio is well below the all-time high of 6.9 recorded in 2022 and is currently the lowest this ratio has been for over a decade. This is helping to ease deposit constraints for potential buyers, as has an improvement in the availability of higher loan to value mortgages.”

“Similarly, the interest rate on a typical five-year fixed-rate mortgage is around 4.3% (for a borrower with a 25% deposit). This is still over three times the all-time lows prevailing in autumn 2021, but well below the highs of c5.7% reached in late 2023.”

Gardner predicted that housing market activity would continue to gradually strengthen through the remainder of 2025, if the broader economic recovery was maintained.