UK housing market outlook: July 2025 data confirms market rebalancing

For property investors, understanding the UK housing market requires analysing multiple price indexes, each with distinct methodologies. With July 2025 behind us, we examine the latest data from Rightmove, Halifax, ONS, and Nationwide to provide you with an actionable market overview.

Last month delivered a stark validation of our June analysis: the buyer power shift is not only real but accelerating. With Rightmove posting its largest July decline in over 20 years and cutting price forecasts in half, the evidence is clear—sellers are adapting to a fundamentally rebalanced landscape.

1) Rightmove: Reality check for seller expectations

Rightmove's methodology: Tracks asking prices from new listings on their platform, providing the earliest indicator of seller pricing behaviour and market sentiment shifts.

July 2025 (latest data) key points:

• Average asking price: £373,709 (down 1.2% month-on-month)
• Largest July drop: Biggest summer decline in over 20 years of data
• Annual growth holding: Just 0.1% ahead of July 2024
• Forecast revision: Growth prediction slashed from 4% to 2% for 2025

What this index tells us about the UK housing market:

Historic rebalancing validates buyer control: July's -1.2% decline follows June's -0.3% drop, representing the most sustained asking price adjustment since the 2008 financial crisis. This isn't seasonal variation—it's sellers fundamentally repricing expectations.

Competition drives realistic pricing: With homes available at decade-high levels, Rightmove reports sellers are "working harder" to capture buyer attention. The portal explicitly notes that "sellers who are over-optimistic on their initial asking price are increasingly at risk of getting lost among the competition."

Regional stratification intensifies: London led monthly declines at -1.5%, with Inner London falling -2.1%. Meanwhile, the North East—the least expensive region—actually gained 1.2%, continuing the pattern where affordability drives performance.

Activity metrics remain robust: Despite price adjustments, sales agreed are 5% higher than July 2024, and buyer enquiries are up 6%. This confirms that competitive pricing is driving transactions rather than dampening market activity.

Strategic forecast revision: Rightmove's reduction from 4% to 2% growth for 2025 reflects recognition that "decade-high supply of homes on the market is limiting price growth." This is the most significant mid-year forecast cut since 2008.

July's data confirms that June wasn't an anomaly—sellers have permanently adjusted to enhanced buyer power, creating opportunities for well-positioned developers who understand the new pricing dynamics.

2) Halifax: Transaction prices follow asking prices

Halifax's methodology: Based on mortgage approvals from one of the UK's largest lenders, reflecting actual agreed transaction prices rather than asking prices.

July 2025 (latest data) key points:

• Average property price: £298,237 (up 0.5% month-on-month)
• Strongest monthly growth: Highest increase since January 2025
• Annual growth: +2.4% compared to July 2024
• Regional powerhouse: Northern Ireland leads at +9.3% annually

What this index tells us about the UK housing market:

Transaction resilience amid asking price adjustments: Halifax's +0.5% monthly growth against Rightmove's -1.2% decline demonstrates that realistic pricing converts to successful sales. Properties entering the market at competitive prices are achieving completion.

Affordability improvements driving demand: Halifax Head of Mortgages Amanda Bryden notes that "mortgage rates continue to edge downwards" and "lenders are also broadening policy, including increasing loan-to-income caps and lowering some income requirements, which is boosting affordability."

Regional performance reflects affordability: Northern Ireland's 9.3% annual growth, followed by Scotland (+4.7%) and Wales (+2.7%), reinforces that markets with lower absolute prices and stronger affordability are delivering superior returns.

English regional bifurcation: The North West and Yorkshire both recorded 4.0% annual growth versus minimal gains in the South West (+0.2%) and South East (+0.5%). This 3.8 percentage point gap represents the largest regional divergence in recent years.

Underlying demand validation: The strongest monthly growth since January suggests buyers are responding positively to improved pricing and lending conditions, validating the market's direction toward equilibrium.

Halifax data reveals that while asking prices adjust downward, actual transaction prices hold firm when properties are realistically priced—a crucial distinction for development appraisals.

3) ONS: May data shows post-stamp duty volatility

ONS methodology: Uses data from HM Land Registry, Registers of Scotland, and Land & Property Services Northern Ireland to track final transaction prices across all residential property sales, including cash purchases.

May 2025 (most recent data) key points:

• Average property price: £268,652 (up 1.1% month-on-month)
• Recovery from April: Following sharp -2.7% decline in post-stamp duty adjustment
• Annual growth resilient: +3.9% compared to May 2024
• Transaction volume recovery: 25% increase to 81,470 transactions (from April's 65,110)

What this index tells us about the UK housing market:

Post-stamp duty market recovery evident: May's +1.1% monthly growth represents clear recovery from April's -2.7% decline, showing the market absorbed the stamp duty policy changes and returned to growth.

Comprehensive market coverage validates trends: As the only index capturing both mortgage and cash transactions, ONS data confirms that the stamp duty disruption affected all buyer segments equally, not just mortgage-dependent purchasers.

Transaction volume normalisation underway: While April saw dramatic volume collapse, the gradual recovery in May transaction numbers supports the view that policy-driven timing distortions are fading.

Annual growth maintains momentum: The +3.9% annual growth rate demonstrates underlying market strength despite monthly volatility, reinforcing that spring disruptions represented timing effects rather than fundamental weakness.

Regional patterns align with affordability: ONS data historically shows similar regional performance patterns to the mortgage lender indices, with affordable markets outperforming expensive ones.

The ONS data provides crucial validation that the market rebalancing we're seeing in July represents continued evolution from the stamp duty disruption, rather than new crisis dynamics.

4) Nationwide: Affordability reached decade-best levels

Nationwide's methodology: Uses building society's mortgage approval data to track transaction prices, with additional focus on affordability metrics and economic context.

July 2025 (latest data) key points:

• Average price: £272,664 (up 0.4% month-on-month)
• Annual growth acceleration: +2.4% versus June's +2.1%
• Affordability milestone: House price-to-earnings ratio at 5.75x—lowest in over a decade
• Mortgage approvals: 64,200 in June, matching pre-pandemic averages

What this index tells us about the UK housing market:

Historic affordability improvement: Chief Economist Robert Gardner emphasises that the 5.75x price-to-earnings ratio is "well below the all-time high of 6.9x recorded in 2022 and is currently the lowest this ratio has been for over a decade." This represents a promising shift in market accessibility.

Post-stamp duty market stabilisation: Gardner notes that "looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well." The 64,200 monthly mortgage approvals match pre-pandemic norms despite higher interest rates.

Structural support factors converging: "Strong household balance sheets, low unemployment, and real earnings growth continue to support housing demand," while improved availability of higher loan-to-value mortgages eases deposit constraints.

Rate environment becoming supportive: With five-year fixed mortgages at 4.3% (down from 5.7% peak in late 2023), financing costs are moderating alongside the Bank of England's expected rate cuts.

Recovery trajectory maintained: Despite monthly volatility, the acceleration in annual growth from 2.1% to 2.4% indicates underlying momentum as stamp duty distortions fade.

Nationwide's data provides the most comprehensive view of market fundamentals, showing that improved affordability and stable lending conditions are creating sustainable demand dynamics.

Regional performance and policy support

July 2025 crystallises the regional opportunity framework that savvy investors and developers should be targeting, while the Bank of England's August 7th rate cut to 4.0% provides crucial policy validation.

Regional hierarchy by affordability:

• Top performers (5%+ growth): Northern Ireland (+9.3%), Scotland (+4.7%), North England (+5.5%)
• Solid performers (3-4% growth): North West and Yorkshire (+4.0%), Wales (+2.7%)
• Challenged markets (sub-1% growth): South West (+0.2%), South East (+0.5%), London (-1.1%)

Strategic insight: Markets with average prices below £250k are delivering 3-9% annual growth, while those above £350k struggle to achieve 1%. ONS data historically confirms these patterns across both mortgage and cash transactions.

Policy alignment strengthens outlook: The BoE's narrow 5-4 vote to cut rates despite 3.6% inflation signals confidence that housing market rebalancing and labour market softening outweigh inflation concerns. With 591,000 tracker mortgage holders benefiting immediately (£29 monthly saving per £100k borrowed), the rate environment increasingly supports transaction volumes while reducing development finance costs.

Investment implications and forward outlook

The July data  validates our June buyer empowerment thesis while revealing clear opportunities in this rebalanced market.

Key factors to monitor:

• Seller adaptation accelerates: Rightmove's forecast cut from 4% to 2% acknowledges decade-high supply will "continue to mute price growth," translating to more realistic land pricing
  
  
• Transaction velocity rewards realistic pricing: The divergence between Rightmove's declining asking prices (-1.2%) and Halifax/Nationwide's growing transaction prices (+0.5%, +0.4%) proves competitive pricing drives sales
  
  
• Regional arbitrage widens: The 10.4 percentage point gap between Northern Ireland (+9.3%) and London (-1.1%) represents the largest regional divergence in years

Development finance considerations:

• Exit pricing discipline: Use transaction prices (Halifax/Nationwide) rather than listing prices (Rightmove) for valuation benchmarks
  
  
• Geographic focus: Target markets achieving 3%+ annual growth where demand-supply dynamics support pricing power
  
  
• Timing advantage: Projects ready for spring 2026 benefit from current land pricing while capturing recovery momentum

Sustainable rebalancing, not collapse: Mortgage approvals match pre-pandemic levels, buyer enquiries are up 6% annually, and Nationwide's 5.75x price-to-earnings ratio—the best in over a decade—creates genuine purchasing power. This isn't demand destruction; it's healthy market evolution rewarding quality operators.

Bottom line

July 2025 represents the market's evolution from seller control to buyer empowerment—a transition that creates both challenges and opportunities. For development finance, this environment rewards:

• Geographic focus on affordable markets delivering 3%+ annual growth
• Conservative exit pricing assumptions based on transaction data rather than listing prices
• Quality project development that stands out in high-choice environment
• Acquisition timing that captures land price adjustments while securing spring 2026 delivery