House prices experiencing a slowdown due to increased pressures from mortgage payments and rental expenses
House Prices and Rents in the UK: A Slowing Finance Market
New data from the Office for National Statistics (ONS) has revealed a shift in the UK's finance market, with figures indicating a slowdown in growth.
The total wage growth including bonuses for the quarter to July rose to 4.7%, up from 4.6% in the previous quarter. Some economists believe this could mean the Bank of England will keep the base rate on hold this week. However, the outlook for mortgage rates has been affected by the 'higher for longer' rate outlook, with mortgage rates edging up in recent weeks.
The average UK home price in July was £270,000, marking a 2.8% increase compared to the same period last year. In England, the average home price stood at £292,000, while in Scotland, it was £192,000. Wales saw an average home price of £209,000, and Northern Ireland reported an average home price of £185,000 in the second quarter of 2025.
The average UK rent in August was £1,348 per month, with England reporting an average rent of £1,403, Scotland £1,002, and Wales £811. In Northern Ireland, the average rent was £860 in June.
Richard Donnell, executive director at Zoopla, stated that rents and home prices are slowing across the UK. This slowdown is due to finance demand cooling and affordability pressures. The Consumer Prices Index (CPI) rate in the UK remained at 3.8% in August, the same as July.
Economists predict that overall CPI and food inflation are likely to rise further this year. This slowdown has implications for home building, as weaker demand is holding back investment in growing supply. David Hollingworth, associate director at L&C Mortgages, anticipates that inflation could nudge higher before it eases, delaying another interest rate cut.
Jason Tebb, president of OnTheMarket, expressed concerns that the chances of the next rate cut coming this month have reduced. Meanwhile, Jeremy Leaf, a north London estate agent, noted that buyers and sellers have become more cautious due to high inflation and slowing mortgage rate drops.
Despite the slowdown, industry figures remain optimistic. Nathan Emerson, chief executive at property professionals' body Propertymark, hopes momentum will continue moving into the autumn. Lee Williams, national sales manager at Saffron for Intermediaries, stated that the figures show a continued momentum in the market.
However, no specific data about the region in Great Britain with the highest or lowest annual inflation rate in home prices for July 2025 is provided in the search results. As the finance market adjusts to these changes, it will be interesting to see how it unfolds in the coming months.
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