The average UK house price increased by 0.2 percent in August, following a revised 0.1 percent decline in July, according to data from Nationwide Building Society. Over the year to August, property values rose 1.6 percent, slightly higher than the 1.4 percent growth recorded the previous month. The average price in August stood at £275,465.
Despite the modest rise, experts noted that market activity and house prices have remained subdued in recent months amid economic uncertainties. Robert Gardner, Nationwide’s chief economist, highlighted ongoing geopolitical tensions, including the conflict in the Middle East, which have contributed to upward pressure on energy costs and market interest rates. He pointed to volatility in expectations surrounding the future trajectory of the Bank of England base rate as an additional factor impacting the housing market.
Gardner also observed that while underlying affordability is improving—house price growth continues to lag earnings growth—this advantage has been partially offset by higher mortgage rates. He suggested that these conditions could lead to renewed market momentum in the coming quarters.
Other analysts offered similar perspectives. Ashley Webb, senior economist at Capital Economics, said the modest price increase reflects the continued dampening effect of previous mortgage rate rises on buyer demand. Webb also noted that uncertainty about potential tax changes expected in the October 28 autumn budget could further restrain house price growth in the near term. She forecast that prices would remain largely flat for the remainder of the year, ending with an estimated 1.5 percent increase compared to a year earlier. However, she and analysts at Pantheon Macroeconomics expressed optimism for next year, anticipating a price rise of around 3.5 percent if the Bank of England lowers the base rate from 3.75 percent to 3 percent.
Market participants cited mixed signals about housing demand. Rob Wood, chief UK economist at Pantheon Macroeconomics, observed that Nationwide’s house price inflation remains stronger than indicators from some softer data sources. Meanwhile, financial planner Ian Futcher of Quilter emphasized that demand for homeownership remains robust overall but is highly sensitive to affordability and expectations about interest rates.
Real estate professionals noted regional disparities and the impact of broader economic uncertainty. Nicky Stevenson, managing director of Fine & Country estate agents, pointed out that national averages mask significant local variations in supply, demand, and pricing, which will be critical factors this autumn. Jason Tebb, president of property search platform OnTheMarket, described the market as subdued but noted that the buyers active during the typically quieter summer period showed price sensitivity.
Iain McKenzie, chief executive of the Guild of Property Professionals, said that market activity is expected to pick up through the autumn, contingent on stable mortgage rates and clearer policy signals. Overall, the housing market appears poised for moderate growth, tempered by ongoing economic and geopolitical uncertainties.