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UK house price growth slows in August: "The housing market is stuck in first gear"

ended 22. October 2025

THE growth of house prices in the UK slowed in August as experts said the market is “stuck in first gear”.

Average UK house prices increased by 3%, to £273,000, in the 12 months to August 2025, down from 3.2% in the 12 months to July 2025, according to official data published this morning. 

Average house prices increased to £296,000 (2.9%) in England, £211,000 (2%) in Wales, and £194,000 (4%) in Scotland, in the 12 months to August 2025.

Separately, average UK monthly private rents increased by 5.5%, to £1,354, in the 12 months to September 2025.

This annual growth rate is down from 5.7% in the 12 months to August 2025.

Average rents increased to £1,410 (5.5%) in England, £815 (7.1%) in Wales, and £1,004 (3.4%) in Scotland, in the 12 months to September 2025. 

In Northern Ireland, average rents increased to £865 (7.1%), in the 12 months to July 2025. 

Bob Singh, Founder at Uxbridge-based Chess Mortgages, said the housing market is being surprisingly resilient.

He added: "House prices once again seem to be defying the laws of gravity posting positive numbers despite the doom and gloom. Whilst the figure dropped marginally, it is still commendable we have not seen the large correction many pundits were expecting. 

“The lowering of interest rates and extended income multiples have helped the market to keep its head above water and now with the prospect of further rate cuts in the pipeline following this morning's inflation data, homebuyers may be slightly more confident going into 2026.”

Babek Ismayil, CEO at homebuying platform OneDome, said the figures on renting are positive.

He added: “The easing in rents throughout 2025 is one positive, as tenants have been under real pressure for many years now. The less you have to pay on rent, the more you have to set aside for a deposit. 

"House price growth cooling is also bringing property in reach of more would-be buyers. It may not be great news for sellers and existing owners but slowing price growth is a boost for first-time buyers.”

Harps Garcha, Director at Slough-based Brooklyns Financial, said buyers will be pleased with the news.

She said: "Encouraging news for buyers, particularly first-time buyers, who have been struggling to keep pace with the ever-rising property prices. Whether this trend will endure is another question entirely, and much will depend on the measures outlined in the eagerly awaited Budget. 

“Forecasted tax increases are likely to leave households with even tighter disposable incomes, reducing their capacity to save for future purchases or commit to monthly expenses. A sustained fall in prices seems unlikely unless there is a meaningful acceleration in housebuilding.”

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said the housing market is “tired”.

She added: "A 3% rise hides a tired market that’s running on nerves, not confidence. Prices aren’t rising because the market’s strong, they’re rising because too few people can afford to move. 

“Homeowners are sitting tight, buyers are battling affordability, and rents are still punishing anyone without a foot on the ladder. What we’re seeing isn’t growth, it’s gridlock dressed up as good news. Until lending, wages and housing policy catch up with reality, this market will keep limping along while families and landlords absorb the strain.”

Andrew Montlake, CEO at London-based Coreco, said the slow in house price growth was expected.

He added: "As we edge ever closer to the Budget, the cooldown in house prices continues. 2025 has been a year of real economic uncertainty so it's unsurprising the rate of price growth has slowed. The Budget has cast a long shadow over the property market and many people are currently sitting tight until they know what they are dealing with. 

"One upside of slowing house price growth is that it boosts affordability for those seeking to get onto the ladder, and we are also seeing a lot of innovation among lenders on that front. Slowing rental growth will also be helping many to make the leap from tenant to homeowner."

Ranald Mitchell, Director at Norwich-based Charwin Mortgages, said homeowners are choosing to stay put rather than move.

He added: "The housing market isn’t falling, it’s just catching its breath. Prices are holding up far better than expected, proving demand hasn’t gone instead just been forced into the rental market. Rents are still racing ahead, showing how tight supply has become and how slow affordability rules are to catch up with reality.

“Lenders are starting to innovate with new income models and flexible criteria, but the pace of change isn’t yet matching the market’s needs. Until it does, we’ll remain in this stand-off with homeowners staying put, renters paying more, and affordability the missing link between the two.”

Dariusz Karpowicz, Director at Doncaster-based Albion Financial Advice, said the market is struggling.

He said: "That 3% price rise might look decent on paper, but it's really just a market stuck in first gear. Fewer people can afford to move, so homeowners are staying put whilst buyers struggle with affordability and rents keep climbing at 5.5%. 

“This cooling actually brings a silver lining for first-time buyers as properties inch closer to affordability. Yes, sellers and current owners won't be popping champagne, but when prices ease and rental growth slows, it gives tenants a better chance to save for deposits and finally step onto the property ladder.”
 

10 responses from the Newspage community

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Editor
Babek Ismayil
CEO at homebuying platform OneDome
The easing in rents throughout 2025 is one positive, as tenants have been under real pressure for many years now. The less you have to pay on rent, the more you have to set aside for a deposit. House price growth cooling is also bringing property in reach of more would-be buyers. It may not be great news for sellers and existing owners but slowing price growth is a boost for first-time buyers.
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Editor
Bob Singh
Founder at Chess Mortgages
House prices once again seem to be defying the laws of gravity posting positive numbers despite the doom and gloom. Whilst the figure dropped marginally, it is still commendable we have not seen the large correction many pundits were expecting. The lowering of interest rates and extended income multiples have helped the market to keep its head above water and now with the prospect of further rate cuts in the pipeline following this morning's inflation data, homebuyers may be slightly more confident going into 2026.
Copy

Editor
Andrew Montlake
CEO at Coreco
As we edge ever closer to the Budget, the cooldown in house prices continues. 2025 has been a year of real economic uncertainty so it's unsurprising the rate of price growth has slowed. The Budget has cast a long shadow over the property market and many people are currently sitting tight until they know what they are dealing with. One upside of slowing house price growth is that it boosts affordability for those seeking to get onto the ladder, and we are also seeing a lot of innovation among lenders on that front. Slowing rental growth will also be helping many to make the leap from tenant to homeowner.
Copy

Editor
Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
The housing market isn’t falling, it’s just catching its breath. Prices are holding up far better than expected, proving demand hasn’t gone instead just been forced into the rental market. Rents are still racing ahead, showing how tight supply has become and how slow affordability rules are to catch up with reality. Lenders are starting to innovate with new income models and flexible criteria, but the pace of change isn’t yet matching the market’s needs. Until it does, we’ll remain in this stand-off with homeowners staying put, renters paying more, and affordability the missing link between the two.
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Editor
Scott Gallacher
Director at Rowley Turton
It’s great news for first-time buyers, with the average property now around £4,900 cheaper in real terms than a year ago — especially as rents continue to rise faster than both inflation and wages. Slowing house price growth isn’t surprising given the current economic backdrop. Many landlords are exiting the market as higher interest rates have made buy-to-lets less profitable and often more hassle than they’re worth. That’s increasing supply, which naturally helps to cool prices. This slowdown offers some much-needed breathing space for those trying to get onto the property ladder.
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Editor
Dariusz Karpowicz
Director at Albion Financial Advice
That 3% price rise might look decent on paper, but it's really just a market stuck in first gear. Fewer people can afford to move, so homeowners are staying put whilst buyers struggle with affordability and rents keep climbing at 5.5%.
This cooling actually brings a silver lining for first-time buyers as properties inch closer to affordability. Yes, sellers and current owners won't be popping champagne, but when prices ease and rental growth slows, it gives tenants a better chance to save for deposits and finally step onto the property ladder.
Copy

Editor
David Stirling
Independent Financial Adviser at Mint Wealth
UK house price growth slowed in August 2025 and will continue to chill until there is clarity on the incoming property tax changes from the chancellor in the Autumn Budget. Rents continue to climb, with Northern Ireland seeing one of the fastest increases at £865 (+7.1%), mainly due to the shortage of stock and competition here.
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Editor
Harps Garcha
Director at Brooklyns Financial
Encouraging news for buyers, particularly first-time buyers, who have been struggling to keep pace with ever-rising property prices. Whether this trend will endure is another question entirely, and much will depend on the measures outlined in the eagerly awaited Budget. Forecasted tax increases are likely to leave households with even tighter disposable incomes, reducing their capacity to save for future purchases or commit to monthly expenses. A sustained fall in prices seems unlikely unless there is a meaningful acceleration in housebuilding.
Copy

Patricia McGirr
Founder at Repossession Rescue Network
A 3% rise hides a tired market that’s running on nerves, not confidence. Prices aren’t rising because the market’s strong, they’re rising because too few people can afford to move. Homeowners are sitting tight, buyers are battling affordability, and rents are still punishing anyone without a foot on the ladder. What we’re seeing isn’t growth, it’s gridlock dressed up as good news. Until lending, wages and housing policy catch up with reality, this market will keep limping along while families and landlords absorb the strain.
Copy

Amit Patel
Adviser at Trinity Finance
UK house price growth has eased slightly to 3.0% in the year to August 2025, signalling a cooling market after months of steady increases. However, rents continue to rise faster than inflation, up 5.5% year-on-year, reflecting sustained demand and limited rental supply. This divergence suggests the housing market is entering a phase of stabilising property values but ongoing rental pressure — a key consideration for both landlords and policymakers heading into 2026.