UK house prices up 0.1% in July as buyers remain cautious on interest rates | Housing market

Economic uncertainty dampened UK house price growth in July as prospective buyers remained cautious about interest rates during the Iran war in what should be the peak housebuying season.

House prices rose by only 0.1% in July from a month earlier, according to the lender Nationwide, while annual price growth slowed to 1.8% this month, down from 2.2% in June.

The UK’s biggest building society said the price of an average home edged slightly higher in July to £277,542, up from £277,484 the previous month. However, this is still lower than the average price recorded in May, when it rose above £278,000.

Robert Gardner, the chief economist at Nationwide, said: “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.”

The Bank of England kept interest rates on hold at 3.75% on Thursday, but warned that a further escalation of the Iran war could push inflation above 4% next year, adding to the cost of living pressures on households.

The UK housebuilder Taylor Wimpey warned of “challenging” market conditions as it reported its results for the first half of the year, saying it was facing weaker demand from buyers at the same time as rising building costs. As a result, it expects to complete between 10,600 and 10,800 homes this year, at the lower end of the range announced in March.

Shares in Taylor Wimpey fell almost 6% in early trading.

Amy Reynolds, the head of sales at the London-based estate agents Antony Roberts, said: “In our offices, prices remain flat with sensible offers being accepted. There are more sellers than buyers, but sellers aren’t panicking – asking prices are coming down, but a lot of that is simply initial overpricing meeting the time it takes to find the market level.”

People in England who own their own homes outright are likely to have lived in the same property for longer than those who have a mortgage or are renting their home, according to government figures, highlighting the churn in the housing market.

Those who own their home outright have lived in their current home for nearly 24 years on average, according to English Housing Survey data, and about a third of those who own outright have lived in the same property for 30 years or more. Nationwide said this could be related to the ageing population, meaning more people transition into owning outright.

Meanwhile, homeowners with a mortgage have been in their current home for an average of almost nine years and those in the private rented sector tend to have spent the shortest time in a property, at four and a half years.

“The moves between tenure types are still significant,” Gardner said. “Nearly 200,000 households previously in the private rented sector became owner occupiers in 2024-25. But there is also a return flow, with about 100,000 households moving into private rented properties having previously been owner-occupiers.”