FX.co ★ UK House Price Growth Above Forecasts

The UK Nationwide House Price Index experienced a 2.4% year-on-year increase in July 2025, surpassing expectations and improving upon June's 2.1% growth. Month-on-month, prices climbed by 0.6%, bouncing back from a 0.9% decline in June and outperforming the anticipated 0.3% rise. Nationwide's Chief Economist, Robert Gardner, commented on the housing market's resilience, noting that despite the volatility caused by the end of the stamp duty holiday, activity remains strong. In June, mortgage approvals totaled 64,200, aligning with pre-pandemic levels even amidst high interest rates. Improved affordability has been bolstered by robust income growth, modest house price increases, and declining mortgage rates. The cost of a typical home is now 5.75 times the average income, a significant decrease from the peak of 6.9 in 2022, marking the lowest ratio in over ten years. Five-year fixed mortgage rates have softened to approximately 4.3%, significantly down from the highs observed in late 2023. With low unemployment, rising real wages, and strong household finances, the market conditions are currently favorable for buyers. Should the central bank decide to cut rates, we may see further strengthening in housing activity.