A shifting landscape: inside the latest ONS house price data

The latest data from the Office for National Statistics (ONS) reveals a continued softening of house prices across the UK, offering a glimpse into the complexities of a market attempting to find its footing amid rising interest rates and broader economic uncertainties.

Some of the industry’s most respected names have provided further insight into what this means.

Chris Storey, Chief Commercial Officer, Atom bank:

“House prices are continuing to bounce back from the temporary lull that followed the end of the stamp duty holiday, though the rate of growth is far more modest than at the start of the year.

The most recent data from Rightmove shows that asking prices have dropped of late, with the number of properties for sale jumping by 10% on the same period of last year.  This competition is pushing sellers to be realistic with their pricing, opening the door for a deal to be done. It’s translating into higher activity levels, with the number of agreed sales up by 8% compared with this time last year, while lower mortgage rates are playing their part too. Moneyfacts analysis shows that average two-year fixed rates have dropped to below the average rates available on five-year terms, for the first time since September 2022, suggesting we are finally putting the effects of the notorious mini-Budget behind us. The combination of wider property choice and lower mortgage rates will help make some buyers make the jump onto or up the housing ladder.

However, a cohort of would-be buyers are being left behind. Analysis of historic first-time buyer data by the BSA suggested that since 2006 around 2.2 million first-time buyers have failed to purchase their first home. These buyers are being handicapped by too few options for small deposits, overly prescriptive lending limits and a blinkered approach to historic credit issues. As an industry we need to not just focus on house price fluctuations, but on fairness too.”

Alex Upton, Managing Director – Specialist Mortgages & Bridging Finance, Hampshire Trust Bank comments:

“Rents are still edging upwards, but there are signs that tenant demand has eased slightly over the summer. Propertymark’s latest Housing Insight report shows new tenant registrations in June fell to their lowest level in years, and the supply-demand imbalance has softened. There are now six applicants per property on average, compared to nearly ten at points last year.

Even so, a modest slowdown doesn’t change the underlying picture. We are still significantly short of the rental stock needed to meet demand, and that structural gap will keep upward pressure on rents for the foreseeable future.

That’s the key message for brokers and landlords. While the market may be adjusting at the margins, the long-term fundamentals haven’t shifted. Professional landlords will continue to invest in quality assets, and strategic portfolio planning remains essential. Securing the right funding and preparing for future regulation will be critical in navigating what comes next.

Over time, it’s also vital that we focus on the right kind of supply. A resilient rental market depends not just on volume, but on quality, accessibility and long-term affordability. Achieving that requires joined-up thinking, targeted investment and policy that supports both tenants and landlords.”

 Thomas Lambert, financial planner at Quilter comments:

“Today’s UK house price index for June 2025 shows that prices rose by 3.7% on an annual basis, bringing the average property price to £269,000. This headline figure sits against a market still struggling with affordability. Mortgage rates have eased from the highs, but typical fixes remain around the 4% mark, which keeps monthly payments far above the levels buyers grew used to in the 2010s.

This morning’s inflation print ticked up again, which makes the path to lower interest rates longer and reinforces the affordability squeeze. On top of that, housing supply remains thin which keeps choice limited for buyers and keeps prices sticky.

Policy noise is adding further uncertainty. Reports this week suggest the Treasury is considering taxing gains on primary residences above a high threshold or introducing new levies on expensive homes. If these rumours do materialise at the Autumn Budget brings, transactions could seize up through the winter as sellers consider sitting on their hands hoping that another government might reverse the changes. That would risk even tighter supply and, paradoxically, could push prices higher by intensifying competition, compounding problems for first-time buyers.

Labour making the Mortgage Guarantee Scheme permanent helps at the margin, but it does not create homes or meaningfully lower borrowing costs. Without more supply and a clearer path on rates and taxation, the housing market could face a winter of discontent that drags into next year with even more people shut out.”

Jonathan Handford, Managing Director at Fine & Country, comments: “Another month of steady house price growth goes a long way towards reassuring sellers that their property is holding its value in the face of economic headwinds.

These figures cover the aftermath of the surge in activity we saw in the spring, and stability is the key theme, following the sudden drop in prices in April.

Demand for property is at its highest level in years, as buyers are making the most of the increased supply of available homes currently on the market, as well as price flexibility in many parts of the country. 

The recent interest rate cut from the Bank of England has helped ease mortgage costs slightly, but future policy remains uncertain. With speculation around changes to stamp duty and a new property tax landing in the autumn budget, forecasts for house prices could be revised for later in the year.

The favourable buying conditions are causing rental price growth to fall, which could incentivise more landlords to sell up, giving buyers even more stock to choose from.

In this climate, sellers should be looking to price their properties realistically and attracting strong interest is key to navigating a cautiously optimistic summer market.”

Tony Hall, Head of Business Development at Saffron for Intermediaries, commented on the latest House Price Index data: 

“Today’s figures show renewed momentum in the housing market, with steady price growth supported by increased buyer confidence and a wider choice of mortgage products. Recent criteria changes from lenders are giving borrowers greater flexibility, which is helping many to move ahead with plans they may have paused earlier in the year. A higher number of homes on the market is also sustaining activity and preventing sharp rises in affordability pressures. 

Earlier this month, the Bank of England reduced the base rate to 4% – the lowest level since March 2023 – and this move is expected to provide further support to affordability in the months ahead. As we move into the second half of the year, these factors point to a positive outlook for buyers and brokers alike.” 

Kevin Roberts, Managing Director, Mortgage Services, L&G comments on the ONS House Price Index:

“The housing market remains buoyant with easing lending conditions and the base rate cut giving first-time buyers renewed confidence to get onto the property ladder. In fact, our Ignite data shows that first-time buyers accounted for 60% of mortgage searches in the first quarter of the year. There’s a diverse range of properties and opportunities for buyers, although conditions vary across the country, with northern regions generally performing strongly and many local markets remaining stable or rising, demonstrating the underlying health of the market. To take advantage of this dynamic market, it’s always a good idea to speak to an independent mortgage adviser.” 

Responding to house prices, Nathan Emerson, CEO of Propertymark, comments: 

“House price growth is widely regarded as being an important factor in boosting overall economic progress, so it is reassuring to see yet more headway as the housing market continues to see momentum.  
  
Despite the impact that Stamp Duty hikes and domestic and global factors have had on the economy, there are still convincing reasons to be optimistic about the property market in general. Total housing construction output has grown recently, and the UK Government and the devolved administrations are keen to meet their ambitious housing targets.  

Additional new housing stock should provide people with extra choice in the longer term and help enable those who aspire to buy grasp their ambitions.”

Responding to rental prices, Nathan Emerson, CEO of Propertymark, says: 

“With the UK Government and the Scottish Government edging towards the final stages of legislating the Renters’ Rights Bill and the Housing (Scotland) Bill respectively, the rental market is about to undergo fundamental changes aimed at strengthening consumer protection.   
  
We currently stand at a point where, on average, across the UK there are typically six people making an application for every rental property available. This represents an extremely unhealthy situation where long-term investment is urgently needed to keep pace with growing demand across nearly all regions.”