UK house prices jump in 'larger than expected rise'

A sharp rise in UK house prices is “larger than expected” but experts warn they will come back down.

House prices increased by +0.4% in July, the highest since the start of the year, according to the Halifax. The annual rate of price growth was +2.4% compared to +2.7 in June, while the average property price, the lender says, is now £298,237 compared to £297,157 last month. 

Chris Barry, Director at London-based Thomas Legal, commented: “While July’s property price rise is larger than expected, it still sits within the manicured landscape of ‘healthy’ given that wage growth continues to outpace. This data is a national picture and regionally you can find huge disparity. 

"In London, house prices have remained fairly static for most of 2025 with the outlook poised to reduce over the second half of the year. We believe house prices generally will start to come down given that completion data is lagging and the new transactions currently being agreed are on the decline.”

However, Northern Ireland continues to record the strongest annual price growth in the UK. There, house prices increased by +9.3% over the past year. The typical home now costs £214,832.

Scotland also recorded positive house price growth in July, increasing by +4.7% with average prices now at £215,238. Property prices in Wales saw a rise, up +2.7%, to an average of £227,928.

Among English regions, the North West and Yorkshire & the Humber have the highest rate of property price inflation, up +4.0% over the last year to £242,293 and £215,532 respectively.

The South West, London and the South East continue to see moderate growth, with prices rising by just +0.2% and +0.5% respectively.

Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, commented: “Just like the Nationwide last week, the Halifax has observed that affordability is improving, and it is. There has been a lot of lender innovation this year and more first-time buyers are now able to get on the ladder.

"Prices continue to defy wider economic conditions, but then that has traditionally been the case with bricks and mortar. Hopefully we get a midday boost with an interest rate cut, which will further stimulate the market.”

Ranald Mitchell, Director at Norwich-based Charwin Mortgages, added: "Not booming, not busting, just quietly adjusting. July’s rise is the strongest this year, but annual growth is cooling and the market remains patchy. Falling mortgage rates and rising wages are helping, but the real test comes as fixed deals end. Some will see payments drop, others will feel the squeeze. It’s a resilient market, but don’t expect fireworks, just a slow, steady reset."

Amanda Bryden, Halifax Head of Mortgages, said: “While the national average remains close to a record high, it’s worth remembering that prices vary widely across the country depending on a number of factors, not least location and property type.

“Challenges remain for those looking to move up or onto the property ladder. But with mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving. Combined with the more flexible affordability assessments now in place, the result is a housing market that continues to show resilience, with activity levels holding up well.

“The second half of this year will also see a notable rise in homeowners coming to the end of fixed-rate deals taken out during the pandemic-era property boom; a period marked by ultra-low interest rates and soaring house prices.

"While most borrowers coming to the end of five-year fixed-rate mortgage deals will see their monthly repayments rise, the extent of this will vary across households. Those coming off a two year fixed-rate are very likely to see their monthly payments come down, as they originally locked in rates during the peak that followed the 2022 mini-budget.

"We’re unlikely to see a significant impact on house prices, but it may influence market dynamics if prospective home movers choose to delay plans as a result of tighter budgets.”

Babek Ismayil, Founder at homebuying platform OneDome, said: "The property market has picked up following a slight slump after the Stamp Duty deadline. It's been a busier summer than usual in our experience. Demand for homes remains strong and could be ignited if we get a rate cut from the Bank of England today. 

“Without a doubt, those who locked into a fixed rate five years ago are going to shift onto higher rates, and it will be interesting to see how this impacts the market. But overall, as ever, this is a picture of a property market showing its usual resilience.”

Samuel Mather-Holgate, Independent Financial Adviser at Swindon-based Mather and Murray Financial, said supply remains a problem: “Trying to get on the property ladder seems even more distant after these figures with still higher average prices, and the rate of change increasing. The only way to fix this is through supply, and we were promised major reform from this government. A year on, however, and we have seen no improvements on the supply side."