UK house prices climb in July as affordability hits decade high

Prices increased by 0.6% month on month, pushing the average UK house price to £272,664.

The figures suggest growing stability in the market, despite a still-cautious economic backdrop.

Crucially for buyers, housing affordability has improved to its best level in over a decade.

The house price-to-earnings ratio now sits at around 5.75, well below the 2022 peak of 6.9.

Nationwide chief economist Robert Gardner said stronger wage growth, falling mortgage rates, and increased access to high LTV products were helping to ease buyer constraints.

“Providing the broader economic recovery is maintained, housing market activity is likely to continue to strengthen gradually in the quarters ahead,” he commented.

The specialist finance industry reacts to the latest house price figures

Tanya Elmaz, managing director of intermediary sales at Together:

"Against expectations, house prices have returned to growth, defying predictions that the market was at risk of an extended slowdown following the end of the stamp duty holiday in April this year. 

“The favourable mortgage rates on offer to buyers have won out over headwinds such as the high tax burden and the faltering wider economy.

“This bodes well for the rest of the year, especially after the typically quieter summer months, and offers positivity for FTBs and second-steppers to make their move before prices rise further.

“There are clearly plenty of opportunities out there, whether for aspiring homebuyers or landlords looking to invest.

“Those keen to move forward with their property plans are best to consider the wide range of financial products available, like Shared Ownership, auction finance, BTL mortgages or bridging loans for fast, flexible finance.”

Tom Brown, managing director of real estate at Ingenious:

“There's clearly a significant and notable shortage of housing inventory across various price brackets and locations. Consequently, any decline in homeowner sales is likely counterbalanced by increased demand from renters and investors.

“This is a trend that is not going away. However, it's crucial to recognise that the situation isn't consistent nationwide or across different property pricing brackets.

“It's helpful to delve into subsectors and regional dynamics when assessing opportunities, as a broad market view can be misleading.

“In the real estate sector, we’re seeing significant investment capital for assets for long-term rental. On account of their scale and buying power, these typically institutional investors face fewer disruptions than owner occupiers or small-scale BTL investors.”

Daniel Austin, CEO and co-founder of ASK Partners:

“Today’s rise in property prices brings some optimism, but growth remains subdued as high borrowing costs continue to weigh on buyers. While the Bank of England’s decision to hold rates offers limited reassurance, persistently elevated fixed mortgage rates are still delaying meaningful relief.

“The construction sector is already grappling with soaring build costs, planning bottlenecks, and a chronic shortage of skilled labour. Investors and developers remain motivated by the enduring supply-demand imbalance, particularly in resilient sectors such as co-living and BTR.

“For investors seeking stability amid global uncertainty, including market volatility triggered by resurgent US protectionism, UK real estate debt continues to stand out. It offers capital preservation, steady income, and insulation from equity market swings, making it an increasingly attractive alternative in this environment.”