1 September 2025
If you are covering the latest Nationwide house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“Today’s Nationwide House Price Index shows house prices fell by 0.1% in August compared to a 0.5% increase in July, while annual growth lowered to 2.1% from 2.4% in July. While the housing market has remained fairly resilient during the usual summer lull, affordability pressures are still weighing heavily.
“Last week’s property transaction figures pointed to relatively steady buyer demand, with July seeing 95,580 residential transactions – a 4% increase compared to the same month last year. However, the most recent inflation print has complicated the outlook for interest rates. Mortgage rates have been easing slightly but typical fixed deals remain around 4%, keeping monthly payments elevated, and higher inflation will make the path to lower interest rates even longer.
“Speculation around potential reforms in the Chancellor’s upcoming budget, including possible levies on high-value homes or changes to capital gains tax on primary residences, could also cause hesitation among sellers. This would tighten supply further and paradoxically push prices higher, worsening conditions for new entrants to the market.
“While the economic backdrop remains challenging, today’s figures suggest the housing market is still managing to hold reasonably firm for now. Sustained momentum will depend on future interest rate decisions and whether upcoming policy decisions support or hinder market activity. Either way, without a significant increase in available homes and clearer policy direction, the market risks stagnation.”
