22 October 2025
If you are covering the latest UK Government HPI, please see the following comment from Karen Noye, mortgage expert at Quilter:
Average UK house prices rose by 0.8% in August to £273,000, leaving values 3.0% higher than a year ago, according to the latest ONS figures. That’s a slight slowdown from 3.2% in July, suggesting prices are rising steadily but cautiously as the market navigates high borrowing costs and wider economic uncertainty.
This morning’s inflation reading, which showed the Consumer Prices Index holding at 3.8%, will do little to shift expectations that the Bank of England will keep interest rates on hold for longer. While inflation has fallen sharply from its peak, it remains almost double the 2% target, and that means mortgage rates are unlikely to fall meaningfully in the short term. For many buyers, affordability remains finely stretched, and that is being reflected in the pace of price growth.
At the same time, speculation about what might be announced in next month’s Budget is giving some homeowners and buyers pause for thought. With rumours swirling around potential housing reforms, from changes to stamp duty to new taxes or reliefs targeted at wealthier homeowners, some people are understandably sitting on their hands until they know where they stand.
If the Chancellor does opt for targeted measures aimed at more expensive properties, that could have a cooling effect at the top end of the market, where many transactions are discretionary. A slowdown there tends to filter down through the housing chain, as wealthier buyers delay moving and those lower down struggle to sell on, potentially gluing up activity more broadly.
For now, the housing market remains remarkably stable given the pressures it faces, but momentum is fragile. With inflation sticky, mortgage rates steady rather than falling, and fiscal uncertainty hanging over the sector, it is little surprise that buyers and sellers alike are adopting a wait-and-see approach ahead of what could be a significant Budget for housing policy.
