UK annual house price growth slowed to 1.8% in July, according to the latest Nationwide House Price Index. This is down from 2.2% in June, but represents a 0.1% increase month-on-month after remaining unmoved the previous month. The average house price now stands at £277,542, marginally up from £277,484 in June.
Commenting on the figures, Robert Gardner, Nationwide’s chief economist, said: “Market activity and house prices have remained soft in recent months, in part reflecting the uncertain economic backdrop. Geopolitical tensions remain high, with the conflict between Iran and the US again exerting upward pressure on energy prices and market interest rates in recent weeks. Financial market expectations for the future path of Bank Rate have been volatile, reflecting shifting views about the inflationary implications of events at home and abroad.”
“Despite the ongoing risks from the latest energy price shock, the Monetary Policy Committee can take some comfort from the fact that consumer price inflation declined further in June. Signs that wage growth has continued to ease gives policymakers more breathing space to assess the extent to which tighter policy is necessary to ensure inflation returns to target.”
Nationwide’s July House Price Index also looked at how long people stay in the homes. According to data from the MHCLG’s English Housing Survey, the average length of residence is around 14 years, broadly unchanged since 2010/11, although significant differences can be seen across tenure types.
Those who own their houses outright spend close to 24 years in their home, more than twice as long as the next longest tenure, with social renters averaging 12.2 years. Those buying with mortgages average 8.9 years in their homes, while private renters have the shortest average, with 4.7 years.
However, there are a couple of significant skews in the data, with around a third of those owning outright living in the same property for 30 years or more, while around half of those in the private rented sector being resident in their current property for two years or less.
Robert Gardner continued: “There has been a small increase in the average residence in the private rented sector over the last decade, while those owning with a mortgage have seen a small decline. The latter may be partly due to homeowners with a mortgage moving more frequently, although compositional changes may also be playing a role (for example, as the population ages and more people transition into owning outright). Around a quarter of those owning a home with a mortgage had been in their current home for two years or less, suggesting higher first-time buyer activity in recent years may also be a factor.”
“As well as considering how long households stay in a given property, it’s also interesting to consider the current pattern of activity and how much churn in the housing market occurred within and between tenure types.”
“The data for households who moved in 2024/25 (the most recent data available) indicates that moves within tenure types dominate. Indeed, around three quarters of all moves were within the same tenure type and a quarter between tenure types.”
Those moving within the private rented sector accounted for the largest share of overall activity, with 640,000 moves within the sector, nearly twice as high as the number moving within the owner-occupier sector.
Nationwide says that moves between tenure types are still significant. Nearly 200,000 households previously in the private rented became owner-occupiers in 2024/45, while there is also a return flow, with around 100,000 households moving into private rented properties having previously been owner-occupiers.
Jason Tebb, president of OnTheMarket, commented: “Average property values were flat on a monthly basis as focused, price-sensitive buyers negotiate, while sellers realise they will struggle to sell over-ambitiously priced homes when there is more stock to choose from.”
“Despite the impact of renewed hostilities in the Middle East on inflation and subsequently interest rates, stalling the expected downwards momentum of base rate this year, the resilience of the market is evident. The signs are that the market has steadied itself and buyers and sellers are getting on with it. The Bank of England’s decision to hold interest rates again yesterday for the fifth consecutive meeting is having a steadying effect, suggesting a calm, considered approach with no need to panic.”
“Mortgage rates are edging upwards, which may increase affordability concerns for buyers in the short term but those who need to move are doing so regardless and are just negotiating harder on the price they are prepared to pay. Inactivity isn’t an option for many, even if a new Prime Minister brings another level of uncertainty. What we do know is that Andy Burnham is instinctively interventionist and housing is where we will feel it first. For our sector, the likely picture is more regulation on the rental side and a real push on supply that will take years to show up in the numbers.”
Nicholas Finn, managing director of Garrington Property Finders, commented: “The summer slowdown started early this year. Several regional markets were sleepwalking even before the holiday season began.”
“Higher mortgage interest rates have combined with an unwelcome dose of uncertainty to dampen buyer demand in many areas. People who need to move for work or life reasons continue to do so, but many discretionary buyers are opting to wait until the dust settles.”
“As a result, the few serious buyers who are out there are spoilt for choice and making the most of their powerful negotiating position. There’s a surfeit of homes for sale in London and the southeast; buyers who have their financial ducks in a row have their pick of the crop and can often secure sizable discounts off the asking price.”
“The balance between supply and demand is more even in northern England. The creation of Number 10 North and the prospect of higher government spending in devolved regions is starting to fuel a Burnham bounce, accelerating price growth in areas where price rises were already robust.”
“But with prices largely stagnant in London and the Home Counties, the North’s momentum is all but cancelled out in the national figures. Nationwide’s data shows price growth for the UK as a whole notched up from zero in June to just 0.1% in July. August, traditionally a quiet month for estate agents, is likely to offer more of the same.”
“The big test will come in September, when the start of the school year fires the starting gun on househunting season. Mortgage interest rates settled in early July, though they have begun to tick up again in recent weeks.”
“The cost of borrowing is still a barrier for some mortgage-dependent buyers, so if rates start coming down again we could see a welcome release of the demand that has been bottled up for the last few months.”
