UK House Price Growth Above Forecasts

The UK Nationwide House Price Index rose 2.4% year-on-year in July 2025, above expectations and June’s 2.1% rise. Compared to the previous month, prices increased 0.6%, rebounding from a 0.9% drop in June and exceeding forecasts of a 0.3% gain. Nationwide’s Chief Economist Robert Gardner noted that, despite volatility from the end of the stamp duty holiday, housing activity remains resilient. In June, 64,200 mortgage approvals matched pre-pandemic levels, even amid higher interest rates. Affordability has improved, supported by strong income growth, subdued house price gains, and falling mortgage rates. The typical home now costs 5.75 times average income, down from the 2022 peak of 6.9 and the lowest in over a decade. Five-year fixed mortgage rates have eased to around 4.3%, well below late 2023 highs. With low unemployment, rising real wages, and healthy household finances, conditions for buyers are favorable. If the central bank cuts rates, housing activity may strengthen further.