Average UK house prices increased by 2% to £272,000 in the year to June, but annual growth slowed from 3% in May, provisional ONS figures show.
The Office for National Statistics said the sharp slowdown reflected weaker price growth this summer compared with the period following the April 2025 stamp duty land tax changes in England and Northern Ireland.
Average prices in England rose by 1.8% over the year to £293,000. Wales also recorded growth of 1.8%, taking its average to £213,000, while prices in Scotland increased by 2.3% to £195,000.
Chris Storey, chief commercial officer at Atom bank, said: “Today’s ONS figures paint a picture of a cautious housing market, with annual house price growth continuing to slow.”
Storey said higher mortgage costs and economic uncertainty had made prospective buyers more reluctant to proceed with transactions.
He added: “Would-be buyers have seen the impact of global events on mortgage rates, and their own monthly outgoings, and so have been more wary about pursuing transactions. Rightmove has just reported the biggest drop in August asking prices since 2018, while the number of homes available has hit a 12-year high.
“Combined with research from Propertymark noting that homes are taking longer to sell, it seems clear that activity is being driven by only the most motivated parties.”
Nathan Emerson, chief executive of Propertymark, said: “The UK’s housing market is central to the country’s economic engine, so any fall in house prices can naturally create a sense of nervousness among sellers, especially when looking at the figures year on year.
“While short-term fluctuations are a normal part of the property market, they can influence confidence and lead some homeowners to delay decisions until there is greater certainty about the direction of the market.
“It will, however, be a case of closely watching how matters progress over the coming months, as significant uncertainty remains, particularly when considering the wider global economy.”
Ian Futcher, financial planner at Quilter, said: “The latest UK house price index shows the housing market continued to edge forward in June, with average property prices rising by 0.1% on the month and 2% annually, bringing the average property value to £272,000.
“Some of this slowing growth was mechanical due to the nature of stamp duty changes in April last year, but nonetheless, today’s figures offer a snapshot of where the market stood several months ago.
“Since June, mortgage market conditions have shifted, with lenders competing more aggressively for business and mortgage pricing improving for many borrowers. Transaction levels have also remained relatively resilient, suggesting there is still demand from buyers despite a challenging economic backdrop.”
Richard Sexton, managing director at LGSS, said the changing market also presented difficulties for lenders and valuers.
He said: “The latest ONS figures point to continued momentum in the housing market, but rising prices can also create a more subtle challenge for valuers: understanding how much of that movement is supported by underlying evidence and how much reflects changing buyer expectations.
“For lenders, the quality and interpretation of comparable evidence therefore remain critical. Transactions provide the foundation for understanding market value, but they are inevitably backward-looking.”
