If you’re feeling confused by the latest UK house price data, you’re not alone.
Halifax reported that house prices in June were flat month-on-month, slipping just £117 to an average of £296,665. That’s not exactly cause for celebration but it certainly hints at growing stability in the market.
But rewind to the beginning of the month and Nationwide was painting a different picture and one where prices fell 0.8% in June and annual growth slowed to 2.1% from 3.5% in May.
Two of the UK’s biggest mortgage lenders. Two very different views on what’s happening to house prices. So what’s going on?
A TALE OF TWO LENDERS
Halifax, part of Lloyds Banking Group, says prices are flat but stable, with annual growth at 2.5%. Nationwide, on the other hand, saw a sharper monthly fall and a steeper slowdown in yearly growth.
Dig beneath the surface and it becomes clear that although both lenders are looking at the same market, they’re also viewing it through slightly different lenses.
Halifax uses a broader dataset based on mortgages it underwrites across the UK. Nationwide’s index is narrower and based on its own mortgage lending and is typically skewed more towards first-time buyers.
That difference in customer base alone can lead to variations and especially in a market as nuanced and fragmented as ours.
Add to that the differences in methodology (Halifax uses a seasonally adjusted average price, while Nationwide adjusts using a different statistical model) and it’s easy to see why the two may occasionally pop out different results.
SOFTENING STABILITY
According to Amanda Bryden, Head of Mortgages at Halifax, the market is showing signs of resilience.
She points to an uptick in mortgage approvals and transactions and Halifax’s own decision to widen affordability criteria, enabling 3,000 additional buyers to access mortgages in the last two months.
“There’s a definite sense that momentum is returning,” she says. “Rising wages, improving interest rate expectations and greater lender flexibility are pulling buyers back in.”
Nationwide’s Chief Economist, Robert Gardner, is more cautious. He suggests the recent dip in their data could be down to weaker demand following April’s increase in stamp duty thresholds, particularly for second home buyers and landlords.
He still expects activity to recover as summer progresses, helped by a low unemployment rate, rising real wages and the growing likelihood of a Bank of England rate cut.
So who's right?
The truth lies somewhere in between. Each offers a valid perspective but neither tells the whole story. They’re not wrong but then they’re not entirely right, either.
PATCHWORK MARKET
Still confused? Welcome to the patchwork market.
The most important thing to understand about the UK housing market in 2025 is that it’s not one market. It’s a patchwork of micro-markets, each moving at their own pace, driven by local economics, demographics and buyer sentiment.
Take Northern Ireland, for example. It topped both indices for annual growth (9.6% in Halifax’s numbers, 9.7% in Nationwide’s). That’s not just noise and reflects real demand, especially in and around border towns where affordability remains attractive compared to Dublin and southern England.
Scotland, Wales, and the North West are also seeing respectable growth and all well above the UK average.
London and the South West? Not so much. The capital saw annual growth of just 0.6% in Halifax’s numbers. Nationwide had East Anglia at just 1.1%.
Even the type of property matters. Nationwide says that terraced houses saw the strongest price growth, while flats continued to underperform, up just 0.3% year-on-year.
That’s a consequence of shifting buyer preferences post-pandemic, where outdoor space and work-from-home flexibility continue to reshape demand.
BUYERS AND SELLERS
These aren’t signs of a market crash. In fact, both indices agree that the market is, if anything, showing signs of stabilisation.
Yes, affordability remains a challenge and especially for anyone rolling off ultra-low fixed-rate deals.
But rising wages, falling inflation and the prospect of interest rate cuts are slowly improving the outlook for borrowers (the Bank of England’s next decision on interest rates will be on August 7, 2025).
Mortgage rates are now at their lowest level since 2023 and most forecasters I speak to are betting on at least one – possibly two – rate cuts from the Bank of England before the end of the year.
If you're a first-time buyer, these next few months could present an opportunity, especially if lenders continue to relax affordability tests and offer incentives.
If you're a seller, managing expectations will be key. Demand is still out there, especially in regions where prices remain sensible and buyers have room to negotiate. But you must remember that the days of double-digit annual growth are long gone – it’s better to price realistically or not at all.
THE RIGHT DIRECTION
Neith Halifax or Nationwide have a monopoly on what’s happening to house prices but together they help us paint a picture of what is happening beneath the headlines.
Two different indices but essentially one story: the UK housing market is regaining its footing and is heading in the right direction.
Some parts of the country are heating up. Others are treading water. But the overall mood is one of cautious optimism.
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