UK house prices stagnate in June

UK house prices remained flat in June 2025, signaling a slowdown in the property market as economic uncertainty and the expiration of temporary stamp duty relief took their toll, according to the latest Halifax House Price Index. The average property price held steady at £296,665, unchanged from May, but down £2,150 from the start of the year. Annual house price inflation slowed to 2.5%, the weakest pace since July 2023, reflecting a market struggling to regain momentum.

The stagnation follows the end of a temporary stamp duty relief in April, which had previously spurred homebuying activity. Combined with a turbulent global economy and a slowdown in the UK jobs market, consumer confidence has taken a hit. Ashley Webb, an economist at Capital Economics, noted, “The housing market remains weak and is still struggling to recover from the stamp duty-induced lull and the recent deterioration in the labour market.” Webb revised his earlier forecast of 3.5% house price growth for 2025, citing a slower-than-expected recovery.

Amanda Bryden, head of mortgages at Halifax, acknowledged the challenges, stating, “Affordability is still stretched, particularly for those coming to the end of fixed-rate deals.” However, she remained cautiously optimistic, suggesting that a stable economic backdrop and potential reductions in borrowing costs could lead to a gradual recovery in the second half of 2025. Halifax anticipates “modest house price growth” if these conditions materialize, supported by increased flexibility in mortgage lending and expected interest rate cuts from the Bank of England.

The broader economic context adds complexity. The UK economy, which grew at its fastest pace in a year (0.7%) in the first quarter of 2025, driven by homebuyers rushing to beat stamp duty deadlines and manufacturers preparing for U.S. tariff hikes, contracted by 0.3% in April. This marked the sharpest monthly decline since October 2023, exacerbated by U.S. President Donald Trump’s tariffs and domestic tax increases. Economists also raised concerns about the quality of UK economic data, with 85% of those polled by Reuters expressing worry over its reliability for guiding monetary and fiscal policy.

Meanwhile, political developments have further rattled markets. Chancellor Rachel Reeves faced scrutiny after an emotional appearance in Parliament, with speculation about her position contributing to a spike in government borrowing costs and a drop in the pound’s value. The Office for Budget Responsibility warned that UK public finances are in a “vulnerable” position due to mounting debt risks, adding pressure on the Labour government’s economic strategy.

Despite these challenges, some sectors show resilience. Unite, a Bristol-based student housing provider, reported strong demand for the 2025-26 academic year, driven by a 2% rise in UK 18-year-old university applications and a 29% increase in student visa applications. This suggests pockets of economic activity remain robust amid broader uncertainty