Nationwide’s latest House Price Index (HPI) for August reveals a slight cooling in the UK housing market, with prices dipping by 0.1%—a reversal from the 0.5% rise seen in July. Annual house price growth also slowed, edging down to 2.1% from 2.4%. While the summer period often brings a natural pause in market activity, this year’s seasonal slowdown is layered with economic complexity: affordability pressures persist, mortgage rates remain elevated, and uncertainty looms over future fiscal policy.
Some of the property market’s most respected names have shared their insights into what the latest data means.
Karen Noye, mortgage expert at Quilter comments:
“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.”
Nathan Emerson, CEO of Propertymark, comments:
Considering the many twists and turns within the wider economy currently, it’s extremely positive to see a further uplift in mortgage approvals. The resilience of the housing market is often a direct indicator of consumer confidence and affordability, and it has been reassuring to see forward momentum as the year has progressed.
Hopefully, now that the Bank of England has taken the call to cut the base rate by a further quarter per cent, we should see lenders bringing additional levels of competition to the marketplace. Those already on fixed-term mortgage products should already be feeling the combined benefit of three base rate cuts across the year.”
Jonathan Handford, Managing Director at Fine & Country, comments: “A marginal 0.1% dip in house prices suggests the market is catching its breath rather than changing direction.
While house price growth appears flat at a national level, it’s worth noting that there are significant regional disparities, with northern England and Scotland continuing to outpace southern areas.
This relative steadiness owes much to improving affordability, as housing costs begin to align more closely with incomes. However, price growth remains tempered by rising levels of supply.
The more-than-healthy stock levels reported by estate agents across much of the country are increasing competition among sellers, giving buyers a stronger hand when negotiating on price.
Uncertainty around potential property tax changes in the autumn budget may also affect pricing and influence sellers’ willingness to be flexible.
As we move into autumn, clarity on fiscal policy and mortgage conditions will be key to sustaining market momentum. While the property industry is highly adaptable, sweeping changes to taxation or policy risk unsettling activity in the short term.”
Matt Thompson, head of sales at Chestertons, says: “Last month, buyers used the holidays to review their finances, refine their search criteria and to view homes they already shortlisted. The number of properties coming onto the market has decreased, however. Whilst there was a substantial increase in landlords selling up amid the Renters’ Rights Bill earlier this year, it was a momentary uplift that has now rebalanced. As a result, buyers will find it more challenging to secure a property within their budget and are advised to start their property search as early as possible.”
