UK House Price Growth Slows in August

The UK Nationwide House Price Index rose 2.1% year-on-year in August 2025, easing from a 2.4% gain in July. On a monthly basis, prices fell 0.1%, defying forecasts of a 0.2% increase, following a 0.5% rise in July. Nationwide’s Chief Economist Robert Gardner noted that house price growth remains subdued as affordability is stretched, with prices high relative to incomes and mortgage costs more than three times pre-pandemic levels. A typical first-time buyer with a 20% deposit now spends about 35% of take-home pay on repayments, above the long-run average of 30%. Gardner expects affordability to improve gradually as income growth outpaces house prices and borrowing costs ease if the Bank of England cuts rates. Housing stock data showed average floor areas rising slightly over the past decade, led by terraced houses, while flats became smaller. More than half of owner-occupied homes are “underoccupied,” reflecting a trend toward larger living spaces relative to household needs.