Real Estate Sector Reacts to ONS’s July Price Index Updates – TNT

The Office for National Statistics (ONS) has released its latest Price Index of Private Rents (PIPR) and House Prices Index (HPI), which analyse changes to average rents and house prices across the United Kingdom.

The headline figures:

• Average UK monthly private rents increased by 6.7%, to £1,344, in the 12 months to June 2025 (provisional estimate); this annual growth rate is down from 7.0% in the 12 months to May 2025.
• Average rents increased to £1,399 (6.7%) in England, £804 (8.2%) in Wales, and £999 (4.4%) in Scotland, in the 12 months to June 2025.
• In Northern Ireland, average rents increased to £852 (7.6%) in the 12 months to April 2025.
• In England, private rents annual inflation was highest in the North East (9.7%) and lowest in Yorkshire and The Humber (3.5%), in the 12 months to June 2025.
• Average UK house prices increased by 3.9%, to £269,000, in the 12 months to May 2025 (provisional estimate); this annual growth rate is up from 3.6% in the 12 months to April 2025.
• Average house prices increased to £290,000 (3.4%) in England, £210,000 (5.1%) in Wales, and £192,000 (6.4%) in Scotland, in the 12 months to May 2025.

Across the regions of England, house price rises range from 1.9% in the South West to 6.3% in the North East.

Director of Benham and Reeves, Marc von Grundherr, commented on the newly released figures: “The latest sold price data show that the monthly rate of house price growth bounced back in May, following a brief period of decline in the wake of the recent stamp duty deadline. At the same time, the market continues to demonstrate stability and resilience on an annual basis, with house prices remaining higher than they were this time last year, despite the strengthening economic headwinds that we’ve had to contend with.”

CEO of Yopa, Verona Frankish, said: “The latest house price figures for May demonstrate a market that is very much on the front foot and ready to build on the momentum gained in recent months, particularly now that the distraction of another stamp duty deadline is behind us. This underlying resilience provides a solid platform for future growth, which will only be strengthened by the announcement this week of the government’s mortgage market reforms.”

On lettings, Gareth Atkins, managing director of Lettings at Foxtons, commented: “The London lettings market showed strong signs of stability in June, with applicant numbers rising 21% from May and new listings at their strongest level in four years. This increase in supply is helping to ease pressure on renters, as seasonal demand increases, and with more applicants in the market, good Landlords will see strong demand across the capital. As we move into the summer, we expect this healthy balance between supply and demand to continue, offering more choice for renters and a stable and predictable environment for London’s landlords.”

Colleen Babcock of Rightmove said of the HPI report: ‘May was the busiest month for agreed property sales since 2022, as the market bounced back from a temporary lull post stamp duty increase. It’s a price-sensitive market right now, with a decade-high number of homes for sale for buyers to choose from.”

Richard Donnell, executive director of research at Zoopla, commented: “The growth in rents is slowing as affordability pressures build, the level of immigration slows and the easing in mortgage regulations makes access to home buying easier for renters on higher incomes. Rents for new lets, which lead the ONS index are increasing at the slowest pace for four years.

“Lower, single-digit house price inflation is positive for the market as there is just enough price growth to encourage sellers to list their homes and buyers to make offers on property without the fear that prices may fall or suddenly surge higher. We expect price inflation to remain low as there are the most homes for sale in seven years, averaging 37 per estate agent.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Although this is the most comprehensive of all house price surveys, as it includes cash and mortgaged transactions, these numbers only reflect activity up to the end of May.  Since then, we have seen the amount of stock continue to pile up, resulting in additional price softening, particularly for flats.

“On the other hand, most agreed sales – though more protracted – are holding, supported by relatively stable employment and mortgage rates but worries about inflation and looming tax rises are an additional concern. The need for vendor patience and realism is becoming increasingly paramount.”

Darrell Walker, group sales director at Chetwood Bank for ModaMortgages and CHL Mortgages for Intermediaries, remarked: “Another month of annual house price growth – and a return to monthly growth – underlines the resilience in the market, but it comes with a caveat. The figures show that while prices are edging upwards, momentum has slowed notably since March’s two-year high. It’s a reminder that although market sentiment remains broadly positive, it is still somewhat fragile.

“Much of this reflects how buyers and investors have become more selective, seeking opportunities that balance short-term value with long-term potential. It’s a clear sign that we’re still in a buyers’ market, shaped by elevated borrowing costs and ongoing uncertainty around the Bank of England’s next move.

“But not all buyers are sitting tight and waiting for the base rate to fall. The latest data demonstrates that prices are rising, and that’s because demand is still there, so the lending market must continue to step up.”

Holly Tomlinson, financial planner at Quilter, said of the HPI: “This marks a modest acceleration in annual growth, though it follows a period of volatility when house price inflation slowed as a result of stamp duty land tax changes introduced in April. Any sustained recovery is likely to be slow and regionally uneven, particularly as broader economic headwinds such as rising inflation continue to weigh on confidence.”

Nathan Emerson, CEO of Propertymark, commented: “Britain needs a stable and thriving private rental market to provide choice to people who intend to put a roof over their heads. New legislation especially in both England and Scotland is adding more uncertainty to aspiring investors and ultimately raising rent prices in the long term, creating a myriad of unintended consequences. It is vital that the UK government and the devolved administrations listen to those working in the lettings market to ensure that the private rental sector works better for everyone.

“There are many reports suggesting that the stamp duty hikes commencing from April this year are having a negative effect as some people are paying between £6,000-£12,000 more in charges, and there are even calls for more flexible stamp duty payment options too. Though this tax was increased to help balance the UK’s finances, other reports suggest these increases are deterring aspiring homeowners. The UK government should listen to those working in the industry who are noticing the negative consequences this policy is having.”

Alex Upton, MD of Specialist Mortgages & Bridging at Hampshire Trust Bank, said: “Yes, rents are still rising, but the pace has eased compared to last year. The mismatch between supply and demand remains the main driver, although there are early signs of the market starting to rebalance. Propertymark’s figures illustrate that shift, with an average of seven applicants now chasing each rental property, down from ten at the peak.

“Over time, the conversation has to move beyond rent levels. Increasing housing delivery is important, but it must be the right kind of supply. New homes need to meet the needs of tenants as well as buyers. A healthy housing market depends on a rental sector that remains accessible and affordable, and achieving that will require planning, targeted investment and a clear commitment to delivery.”

Chris Storey, chief commercial officer at Atom bank, remarked: “Reductions in borrowing costs are making would-be purchasers more confident. Data from Moneyfacts shows that two-year fixed rates, for example, are now at the lowest levels since September 2022, while borrowers have an exceptional level of choice, with the second highest number of mortgage products available since 2007. That combination of keen pricing and wider availability is opening up the market to more buyers, and that sort of activity may push prices higher in the months ahead, particularly if – as expected – we see at least one more Base Rate cut, despite the rate of inflation remaining higher than expected.”

Kevin Roberts, MD of mortgage services, L&G, commented: “Momentum is building in the housing market, driven by competitive mortgage rates and the rise in mortgage approvals this year. Confidence may be further buoyed by the Leeds Reforms to support first-time buyers and those remortgaging. This market amplifies the importance of seeking professional mortgage advice, particularly with first-time buyers accounting for 64% of mortgage searches, according to our broker data. Buyers who seek expert advice now are best placed to take advantage of the opportunities in this fast-moving market.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Easing of mortgage lending rules should in theory enable borrowers to take on bigger mortgages and afford the houses they desire. Rate reductions have been playing their part in encouraging buyers and sellers to take the plunge and the markets still expect a further cut in Bank Rate next month, even though inflation ticked up in June.”