Today's ONS data shows average UK house price up 3.9%, to £269,000, year-on-year to May 2025. Our senior economist Jake Finney comments on the trends.
A few thoughts from me on the latest house price data that was distributed to journalists earlier today: 🏚️ House price growth edged up in May, with annual inflation rising to 3.9%. The recovery from April’s sharp monthly fall suggests the market is beginning to stabilise following the disruption caused by the stamp duty changes. This supports our view that recent volatility reflects activity brought forward ahead of the tax change, rather than a sustained weakening in underlying demand. ⬆️ Regional trends continue to diverge, with house price growth generally stronger in the North than in the South. This likely reflects more favourable affordability conditions in lower-priced regions, while higher house prices relative to incomes in the South continue to weigh more heavily on demand and price growth. 💸 The near-term outlook remains challenging, with households still highly sensitive to elevated prices amid stretched mortgage affordability. The Bank of England estimates that 3.6 million households, just over 40 percent of mortgage holders, will see their monthly payments rise over the next three years. However, these pressures should gradually ease as mortgage rates continue to fall in line with the monetary policy easing cycle. Gareth Hill Laetitia Lynn
