Nationwide’s House Price Index for June shows a slight slowing of growth, at 2.1% compared to 3.5% in May. The building society said the dip could be due to weaker demand – but property experts disagree, with one saying the figures are a sign of ‘a market firing on all cylinders’.
Although chief economist Robert Gardner attributed the reduction to a slight drop in demand following stamp duty changes, he acknowledged that underlying conditions for potential homebuyers remain positive.
He explained:
“The unemployment rate remains low, earnings are rising at a healthy pace in real terms (i.e. after accounting for inflation), household balancesheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect.”
Iain McKenzie, CEO of The Guild of Property Professionals, said the moderation in annual price growth is a sign of a market ‘maturing and finding a healthier, more sustainable balance’.
“While headlines may focus on the slowdown in price inflation, the real story is in the sheer volume of activity. The recent 25% month-on-month surge in property transactions demonstrates that the desire to move remains incredibly robust. Following the artificial lull created by the stamp duty deadline in March, genuine, underlying demand is now firmly back in the driving seat.”
The increase in choice for buyers, in terms of both available properties and mortgage products, is tempering ‘frantic price growth’ and creating a more stable environment, McKenzie added.
“This isn’t a market running out of steam; it’s a market firing on all cylinders. Demand is being actively fuelled by more accessible mortgage lending and the recent interest rate cut, which have unlocked a new wave of purchasing power. Mortgage approvals have risen for the first time in four months, which again points to a desire to move.”
The result, he believes, will be strong market for the rest of 2025:
“What we are witnessing is the perfect recipe for a strong and stable market: confident, empowered buyers are being met with a greater supply of homes. This shift from a supply-starved, frantic market to a balanced, active one is fantastic news for anyone looking to make a move in the second half of the year.”
Foxtons CEO Guy Gittins agreed – and pointed out that despite the marginal reduction, house prices remain higher than this time last year.
“We’ve already seen a heightened degree of activity over the first six months of the year and it’s only a matter of time before this stimulates further positive house price growth. As we head into the summer months, our expectation is that market activity will continue to strengthen, which stands us in very good stead come the end of the year.”
Across the regions, Northern Ireland remained the strongest performer by a wide margin, with annual price growth at 9.7% (down from 13.5% in Q1). Scotland recorded a 4.5% annual rise, while Wales saw a 2.6%increase.
In England as a whole, prices were up 2.5% year-on-year (down from the 3.3% annual rise seen last quarter). Average prices in Northern England (North, North West, Yorkshire and The Humber, East Midlands and WestMidlands) were up 3.1% year-on-year, while those in Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) were up 2.2%.
The North was the top performing region in England, with prices up 5.5%. East Anglia was the weakest performer, with annual growth of 1.1%.
