House Prices Up 3.7% On Back Of High Demand – ONS

20 August 2025: Falling Interest Rates Drive Inflation

Average UK house prices increased 3.7% in the 12 months to June 2025, according to the Office for National Statistics (ONS), writes Bethany Garner.

This rise takes the average price to £269,000 – a £9,000 increase compared with 12 months ago. Prices were up 1.4% in June.

The ONS figures, based on completed sales, show that prices increased more in Scotland than in other UK nations in the last 12 months, with average prices jumping 5.9%. The average Scottish property is now valued at £192,000 – £11,000 more than a year earlier.

English house prices saw an annual rise of 3.3% (£9,000), while prices in Wales are up 2.6% (£6,000).

In Northern Ireland, the average property price increased by 5.5% in April to June 2025 – up 5.5% compared with the same period in 2024.

Commentators suggest the market is recovering from a fall in activity following changes to Stamp Duty in England and Northern Ireland in April that left more buyers paying higher levels of tax on their property purchase.

According to government data, the number of UK residential transactions in June was 13% higher than the previous month.

Falling mortgage rates, driven by the Bank of England’s decision earlier this month to reduce the Bank Rate to 4%, may be driving this renewed activity.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “House sales had collapsed in April and annual price rises fell significantly. The months since have seen a partial recovery.

“Lower mortgage rates should also help support prices. These have been fluctuating recently, but two and five-year fixed rate deals have finally fallen below an average of 5% for the first time since the infamous mini Budget [during Liz Truss’s premiership in October 2022].”

Thomas Lambert, financial planner at Quilter, said affordability challenges persist: “This morning’s inflation print ticked up again [to 3.8%], which makes the path to lower interest rates longer and reinforces the affordability squeeze.

“On top of that, housing supply remains thin, which keeps choice limited for buyers and keeps prices sticky.”