Annual house price growth in the UK has slowed as London sees a decline in average property values

Annual house price growth slowed in August London being the only one English Areas where property values ​​declined, according to National Statistical Office (ONS) figures.

According to provisional estimates from the ONS, the annual growth rate in property prices was 3.0% in August, down from 3.2% in July.

In the 12 months to August 2025, average house prices in England rose by £296,000 (2.9% annual increase), in Wales by £211,000 (2.0%) and in Scotland by £194,000 (4.0%).

The average house price in Northern Ireland in Q2 2025 was £185,000, representing 5.5% annual growth.

within England, North east Annual house price inflation peaked at 6.6% in August. Annual house price inflation was the weakest in London, with average house prices falling by 0.3%.

Amy North, ONS head of housing market indices, said: “UK annual house price inflation slowed in August, with the average UK house price now standing at around £273,000. The North East has once again seen the highest annual rise and London is the only English region to show an annual decline.

“UK annual private rental inflation fell for the ninth consecutive month, and annual growth slowed for all UK countries.”

The ONS also released figures showing that the average private rent in the UK was £1,354 a month in September 2025 – up £70 (5.5%) from 12 months earlier.

The average monthly rent in England was £1,410 in September 2025, up 5.5% (£74) from a year earlier. The ONS said England’s annual increase represented the 10th consecutive month of slow annual inflation.

In England, annual inflation in rental prices was highest in the North East (9.1%), and lowest in Yorkshire and the Humber (3.8%) in the 12 months to September.

In Wales, the average monthly rent in September was £815 – an increase of 7.1% (£55) from a year earlier.

The average monthly rent in Scotland was £1,004 in September, up 3.4% (£33) from a year earlier. The report said this annual increase is the lowest for more than three years and that Scotland’s annual inflation rate is generally slowing since a record-high annual increase of 11.7% in August 2023.

The ONS said the average fare in Northern Ireland in July was £865. This was an increase of 7.1% (£57) from a year earlier.

Some housing market experts said there will be uncertainty around autumn Budget Emotions have been affected.

The figures were released as the ONS said consumer price index (CPI) inflation stood at 3.8% in September, the same level as both July and August.

James Evans, chief executive of estate agents Douglas & Gordon, said: “Many buyers who held off at the start of the year are now back in the market, encouraged by more stable rates and improving affordability.

“This is a positive sign, but we are not out of the woods yet. Policy uncertainty ahead of the autumn budget is already making some buyers cautious, especially at the higher end.”

Colleen Babcock, a property expert at Rightmove, said: “The decade high level of house prices this year has limited the rise in house prices compared to last year.

“Buyers have more choices and more negotiating power, and we are seeing more realism from sellers about the prices they can set to find buyers amid the competition.

“However, prices are rising more strongly in the north of England, Wales and Scotland, where more affordable price points mean the changes to stamp duty charges from April have had less of an impact.”

Stamp duty applies in England and Northern Ireland.

Ms Babcock said: “They (stamp duty charges) have had a greater impact in the higher-priced south of England, where there is now some uncertainty about what might happen in the upcoming autumn budget.

“Affordability is stretched, mortgage rates are stable but slow to come down, and today’s stubborn inflation data also highlights broader affordability challenges.”

Simon Gerrard, chairman of Martin Gerrard Estate Agents, said: “These figures for August represent sales at the beginning of the year and do not reflect the slowdown that began after budget speculation began.

“People are not making property decisions until it is clear what new measures are coming.”

Jonathan Handford, managing director of Fine & Country, said: “Mortgage costs have declined slightly in recent weeks, which is helping to maintain buyer interest and giving families more confidence in planning their next move.

“Autumn is traditionally a busy period for the market, as many buyers and sellers look to close before Christmas or at the start of the New Year.”

Jonathan Hopper, chief executive of Garrington Property Finders, said prices in London were “under pressure”.

He continued: “Two factors are driving these changes. Firstly the imbalance between supply and demand is giving buyers the double luxury of time and choice, and encouraging them to ask for and receive price reductions.

“But we are also seeing a two-speed market emerging among buyers. Those who need to move are moving, but are negotiating hard to de-risk themselves from any tax changes in next month’s Budget.

“Meanwhile discretionary movers – particularly those looking at higher price points – are taking a wait-and-see approach. They are unlikely to take their finger off the pause button until after the Budget, so the prime property market could remain in suspended animation until the New Year.”

Jason Tebb, chairman of OnTheMarkets, said: “Although inflation was lower than expected and unchanged at 3.8%, it is still almost double the Bank of England’s 2% target.

“With the bank keeping interest rates at 4% in its last meeting, borrowers may be disappointed that rates are not coming down faster, but at least the focus is on stability.

“Recent rate cuts have provided a real boost to buyer and seller confidence and activity over the past year, however affordability still remains a challenge and is keeping property prices in check to a degree.”