Average property prices in the UK have hit a new record high after rising by 0.3% in August to reach £299,331, according Halifax.
The mortgage lender’s house price index revealed, over the last year, the typical property had risen in value by 2.2% – which is down on the 2.5% in July.
Yet, Halifax’s data shows prices ‘rising steadily’ with Northern Ireland recording the UK’s strongest annual growth at 8.1%.
Amanda Bryden, head of mortgages, Halifax, said: “The story of the housing market in 2025 has been one of stability. Since January, prices have risen by less than £600, underlining how steady the market has been despite wider economic pressures.
“Affordability remains a challenge, but there are signs of improvement. Interest rates have been on a gradual downward path for nearly two years, and many of the most competitive fixed-rate mortgage deals now offer rates below 4%.
“Combined with strong wage growth – which has outpaced house price inflation for nearly three years – this is giving more prospective buyers the confidence to take the next step.
“Summer is typically a quieter period for the market, so the recent rise in mortgage approvals to a six-month high is an encouraging sign of underlying demand.”
The data comes in the same week Bank of England data showed mortgage approvals had risen – an indication demand for properties had also started to recover.
Karen Noye, mortgage expert at Quilter, said all these factors offered some ‘green shoots of optimism’ as the summer ended.
However, she remained concerned about affordability. “Mortgage rates,” she said, “though down from their peak, have proved sticky and even edged back up in recent weeks as swap rates moved higher.
“First-time buyers still face a daunting hurdle, while many existing homeowners are reluctant to take on new borrowing, keeping transaction volumes depressed.
“Budget rumours are also adding another layer of uncertainty. Talk of new property-related taxes is likely to keep many would-be sellers on the sidelines, fearful of moving just before potential reforms.”
She added: “All told, while there are tentative signs of life, the housing market faces a challenging winter. Without a decisive fall in borrowing costs, green shoots may quickly wither, and affordability will remain the central obstacle to sustained recovery.”
However, Halifax’s Amanda Bryden was more positive for the coming months. “While the wider economic picture remains uncertain,” she said, “the housing market has shown over recent years that it can take these challenges in its stride. Supported by improving affordability and resilient demand, we expect to see a slow but steady climb in property prices through the rest of this year.”
