Property Market Update: August 2025

Welcome to the August edition of our Property Market Update, covering what’s been happening in the UK housing market during July 2025. We’ve gathered insights from leading indices and industry sources – including Rightmove, Zoopla, Halifax, Nationwide, and Moneyfacts – to give you a comprehensive overview of the latest trends. From price movements and buyer demand to mortgage rates and housing supply, here’s what’s shaping the market as we head toward late summer.

House prices resilient amid seasonal slowdown

July brought a mixed picture for house prices, with overall values holding up relatively well despite an expected summer slowdown. Halifax – often viewed as a key benchmark – reports that the average UK house price sits around £296,000, showing little to no change compared to June. This leaves prices roughly 2–3% higher than a year ago, a modest annual growth rate that underlines the market’s continued resilience.

Nationwide data echoes this steady trend. After a small dip in June, Nationwide recorded a 0.6% rise in house prices in July, nudging its annual house price growth to about 2.4%. In other words, both major lender indices (Halifax and Nationwide) are indicating low single-digit percentage growth year-on-year – a far cry from the rapid gains of recent years, but still growth in positive territory.

On the asking price side, there was a notable seasonal adjustment. Rightmove’s July House Price Index revealed that new seller asking prices fell by 1.2% in the month – the largest July drop in over two decades. This brings the average asking price to roughly £374,000 and essentially flat (+0.1%) compared to July 2024. Industry commentators point out that this dip is largely seasonal and reflective of higher supply and summer holiday distractions, rather than a sign of any acute distress in the market.

Indeed, regional variations back this up: areas like London saw bigger monthly price falls (over 1.5% down in July, partly due to post-stamp-duty-change effects in higher-priced markets), whereas regions such as the North East of England bucked the trend with slight price gains. The broad takeaway is that prices are adjusting slightly down in some areas to entice buyers, but the overall market pricing remains stable relative to last year.

Buyer demand stays strong despite summer lull

One of the most encouraging stories of this summer is that buyer demand has proven stronger than expected. Typically, interest from buyers cools off in July as families focus on summer holidays. But this year, multiple sources indicate demand is actually up on an annual basis. According to Zoopla, buyer enquiries and demand in recent weeks were about 11% higher than this time last year, defying the usual seasonal trend. Similarly, Rightmove reported a year-on-year increase of around 6% in buyer demand in early July.

Sales activity is also robust: the number of sales agreed is running about 5–8% higher than a year ago (with Rightmove noting roughly +5% and Zoopla about +8% year-on-year). Estate agents across many regions have observed that motivated buyers are still in the market, keen to secure purchases before the school holidays and before any further interest rate changes.

This slight uptick in summer demand can be attributed to several factors. First, improving affordability and confidence are bringing some buyers back who had paused their searches. Second, the sense that we’re in a more buyer-friendly market – with more choice and slightly more negotiable prices – is encouraging house-hunters to re-engage. Even though economic uncertainty and higher living costs remain in the background, underlying conditions like low unemployment and rising wages are providing a degree of support to buyer sentiment. As a result, the usual summer lull in housing market activity has been milder than anticipated, with demand remaining healthy by historical standards.

More homes on the market boost choice for buyers

On the supply side, the housing market continues to offer much more choice than a year ago, a trend that has been developing throughout 2025. There has been a surge in property listings compared to last summer – Zoopla notes that the number of homes for sale is up 12% year-on-year, reaching the highest level in several years. In fact, July saw a record number of houses on the market for this time of year. Estate agents now have a greater stock of properties available; many report an average of over 34 properties per branch, up from around 30 a year ago, reflecting this improved supply.

This increase in housing stock is a welcome change after the supply squeeze of previous years. More choice means prospective buyers have a better chance of finding a suitable home, and it reduces some of the frantic competition we’ve seen in the past. Importantly, a healthier supply is also acting as a pressure valve on price growth. With buyers able to pick from more options, sellers have become more realistic on pricing to secure a sale – a dynamic clearly illustrated by the slight dip in asking prices last month.

It’s worth noting that many sellers are also buyers (trading up or down), so an increase in listings can actually help unlock more transactions overall. People feel more confident listing their home if they see they’ll have somewhere to move to. The net effect is that transaction volumes are holding up even as price growth cools, which is a sign of a market that’s active but balanced. More supply and choice are contributing to a more normalized, sustainable level of market activity compared to the frenetic pace of the post-pandemic boom.

Mortgage rates ease, helping affordability

The mortgage market in July offered some brighter news for buyers and movers. After a period of rising interest rates in 2023 and early 2024, mortgage rates have been gradually easing in recent months. The Bank of England’s base rate has now fallen to 4%.

According to Moneyfacts, the average two-year fixed mortgage rate at the beginning of August is hovering around 5%, with the average five-year fixed rate very similar. These averages are down significantly from late last year – for context, a typical two-year fix was above 6% in mid-2023. Analysts highlight that today’s rates translate into monthly savings of around £150–£200 on a £250,000 mortgage compared to last summer.

Borrowing power has also increased due to relaxed affordability assessments. Zoopla highlights that buyers can potentially borrow up to 20% more than under previous affordability rules. Halifax confirms approving thousands more loans that previously wouldn't have qualified. These improved conditions are significantly boosting buyer confidence.

Summary: a market adjusting, not collapsing

In summary, the UK property market in July 2025 is adjusting rather than correcting dramatically. House prices remain stable, buyer demand robust, and supply is improving. Conditions are balanced, with modest price growth predicted at around 1–2% annually.

Buyers have increased negotiating power and choice, while realistically priced homes continue to sell successfully. Looking forward, potential interest rate cuts and continued economic stability offer reasons for cautious optimism, signaling a steady, adaptable market ahead.