UK house price growth slows in July as northern regions outpace the south

House price growth across the UK slowed in July, the Office for National Statistics said, with annual growth easing from 3.6% in June to 2.8% last month. That rate means the typical home is about £8,000 more expensive than a year earlier, but the national picture masks large regional differences.

Much of the year-on-year increase was concentrated in more affordable areas of the country. The North East recorded the strongest annual rise, up 7.9% to an average price of £163,684. The North West rose 4.8% and Yorkshire and the Humber increased 3.9%. By contrast, London posted only a 0.7% annual rise, with the average London home fetching £561,587. The South East and South West recorded modest annual gains of 1.2% and 1.4% respectively.

The ONS figures are based on sold prices, which reflect transactions agreed in preceding months. While yearly increases remain strongest in several northern regions, the monthly rate of growth largely stalled in July even where annual growth is highest. Jonathan Hopper, chief executive of buying agent Garrington Property Finders, noted that on an annual basis the North East is growing far faster than London, but said both regions recorded "the same rate of growth — zero" in July.

Property type differences also emerged. Detached and semi-detached houses rose 3.6% year on year, while flats and maisonettes increased only 0.7%. Industry data suggest a growing share of flat sellers are making losses. Estate agent Hamptons reported that, in 2025 to date, 22% of flat sellers sold for less than they paid, more than double the rate across the wider market. Analytics firm Property Data found that 24% of flats sold in London between October 2024 and June 2025 were sold at a loss compared with their purchase price.

New-build prices have shown volatility. In the year to May the average price paid for new builds in England rose 7.7%, but prices plunged 3.9% in May compared with April. Hopper said the cooling is "nowhere sharper than with new build homes," pointing to patchy developer supply and growing buyer wariness about paying premiums for brand-new properties.

Market forecasters have lowered near-term expectations. Knight Frank this week revised down its forecast for UK house price growth to a 1% increase for 2025, down from a 3.5% projection issued four months earlier. Tom Bill, head of UK residential research at Knight Frank, said higher supply and weaker demand were weighing on prices. He cited an overhang of property following April’s stamp duty changes and an increase in landlord sales driven by proposed rental reforms as contributors to the higher supply.

Stable mortgage rates have helped underpin some demand, but Bill said a broader mood of economic uncertainty — which he expects to intensify as the government approaches its November Budget — has made some buyers cautious. That caution, together with higher listings, prompted Knight Frank to revise down its forecasts for this year and into 2026.

Industry advisers and lenders urge buyers and homeowners approaching the end of fixed-rate deals to review options early. Mortgages experts recommend comparing rates, speaking with a broker and considering locking in a deal several months before a current rate expires. Consumers should be aware that some products allow arrangement fees to be added to the loan, which increases the amount on which interest is paid over the mortgage term. Buy-to-let landlords, particularly those on interest-only mortgages, face larger potential rises in monthly costs and are being advised to plan remortgaging well in advance.

The ONS data and industry surveys point to a market that is uneven geographically and by property type. While parts of the north continue to record meaningful year-on-year rises, the pause in monthly growth in July, weakness in flats and new-builds, and softer forecasts from major agents indicate a housing market adjusting to higher supply and more cautious buyer sentiment.