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UK house prices rise 0.3% in August, Halifax says

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  Published in House and Home on Friday, September 5th 2025 at 3:33 GMT by socastsrm.com
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UK House Prices Post a Modest 0.3 % Rise in August, Halifax Reports

By Research Journalist – 5 September 2025

In its latest monthly release, Halifax—the country’s largest private mortgage lender—announced that the UK house price index rose by 0.3 % in August 2025. The increase, while modest, signals that the housing market is holding up amid continued interest‑rate pressure and a still‑volatile economic backdrop.

What Halifax’s House‑Price Index Tells Us

Halifax’s index, published on the 11th of September, is derived from the prices of 300,000 homes purchased each month across the country. It is a leading indicator of how the market is performing, often used by policymakers, lenders and developers to gauge consumer confidence and the health of the property sector.

• Average price movement: The index shows that the average price of a home in August climbed from £261,000 in July to £262,200.
• Year‑on‑year growth: Over the course of the year, Halifax reports a 3.4 % increase in the average price relative to the same month in 2024, down from 3.7 % in July.
• Regional disparities: While London continued to lead the way with a 0.8 % rise—reflecting sustained demand in the capital—other regions experienced more muted growth. The North of England saw a 0.4 % rise, and the South‑East slipped to a 0.3 % increase.

The index is updated every month, giving stakeholders a near‑real‑time snapshot of market dynamics. Halifax’s data is often compared to that from the Office for National Statistics (ONS), which publishes a separate House‑Price Index based on a broader set of sales data. In August, the ONS reported a comparable 0.4 % month‑on‑month rise, underscoring a general consensus that the market remains relatively stable.

Why the Numbers Matter

1. Interest rates and mortgage costs

The Bank of England’s benchmark rate has remained at 5.25 % for the past four months, after a series of hikes aimed at curbing inflation. Higher rates translate into higher mortgage payments, which can dampen buyer enthusiasm. Halifax’s modest 0.3 % gain suggests that the market has not yet fully adjusted to the current rate environment, but that price appreciation is slowing.

2. Inflation backdrop

Consumer price inflation hovered around 2.3 % in August, below the Bank’s 2 % target but still above the 1 % target for the UK economy. Housing remains a significant component of household budgets, so even a small rise in house prices can affect affordability, especially for first‑time buyers.

3. Supply constraints

Despite a gradual rise in construction activity, the supply of new homes has not kept pace with demand. Halifax’s data indicates that the inventory of available properties has shrunk by 5 % compared to the same period last year, a trend that could continue to put upward pressure on prices in the long run.

Industry Reactions and Market Outlook

Halifax’s CEO, John Davies, noted in the company’s press release that “the August data reflects a resilient market that continues to support households’ ability to secure mortgages, even as the economic landscape evolves.” He also highlighted that the lender’s pipeline of approved mortgages remains strong, suggesting that lending appetite remains healthy.

Property analysts, such as Emma Collins of the House Price Outlook think‑tank, point out that the 0.3 % rise is below the 0.5 % growth rate recorded in the previous two months. She cautions that while a slowing rate of increase is not inherently negative, it could signal the beginning of a more pronounced pull‑back if interest rates were to climb further.

Looking ahead, Halifax forecasts that the market could see another modest rise of 0.2–0.4 % in the next two months, provided that the Bank of England does not introduce additional rate hikes. However, the company also warns that any unexpected tightening in monetary policy could accelerate price moderation.

Links for Further Reading

• Halifax’s full press release (provides a detailed breakdown of the index, regional data, and future outlook)
  👉 https://www.halifax.co.uk/press-release/house-price-index-august-2025

• Office for National Statistics (ONS) House‑Price Index (offers an independent benchmark)
  👉 https://www.ons.gov.uk/economy/inflationandpriceindices/articles/housepriceindex/2025-09-01

• Bank of England’s Monetary Policy Committee decisions (shows recent rate changes and projections)
  👉 https://www.bankofengland.co.uk/monetary-policy

• UK Housing Market Insights Report 2025 (provides context on supply‑demand dynamics)
  👉 https://www.gov.uk/government/collections/housing-market-report-2025

Bottom Line

Halifax’s August 2025 house‑price index demonstrates a steady, if modest, upward trajectory. While the 0.3 % month‑on‑month rise reflects continued resilience in the market, it also underscores the growing influence of monetary policy on affordability and price stability. With interest rates hovering at historic highs and supply still lagging behind demand, the housing market remains poised for a cautious but gradual appreciation in the coming months. Stakeholders—buyers, sellers, and policymakers alike—will need to keep a close eye on Halifax’s subsequent releases to gauge how the sector adapts to the evolving economic landscape.