The UK housing market in July experienced a notably sharp slowdown, with asking prices seeing the steepest July fall on record, according to the Financial Times. This unseasonal dip is attributed to a significant increase in the supply of homes for sale, creating a buyers' market where sellers are forced to be more competitive with their pricing. Rightmove reported a 1.2% average drop in asking prices, equivalent to £4,531, bringing the average to £373,709. This marks the biggest July drop in over two decades of house price records.
Despite this slowdown in asking prices, Zoopla's House Price Index for July 2025 indicated robust market activity. Agreed sales were up 8% year-on-year, and buyer demand increased by 11%. The average UK house price, according to Zoopla, stood at £268,400 as of June 2025, representing a 1.3% rise over the past year. This growth is slower than six months prior (2.1%). Zoopla forecasts a modest 1% rise in house prices for 2025, which they believe will improve affordability and sustain market confidence.
A significant factor impacting price growth, particularly in England and Northern Ireland, is the higher stamp duty costs. Post-April, 83% of homeowners now pay stamp duty, averaging £2,500 per sale, compared to 49% previously. London, especially inner London, saw the largest price drops, exacerbated by these increased duties. However, recent relaxations in mortgage affordability testing, allowing buyers to borrow up to 20% more, have spurred some activity before the traditional summer slowdown, creating new opportunities for sales, especially for those previously at the edge of affordability.
