UK House Prices Stagnate Amid Global Uncertainty

The latest numbers from Nationwide paint a picture of a housing market in limbo, where buyers remain hesitant to take the plunge despite low interest rates. The 0.1% increase in house prices in July is hardly surprising, given the geopolitical turmoil dominating headlines for months.

Ongoing tensions between Iran and the US have created an air of uncertainty that’s weighing on prospective buyers’ minds. As Robert Gardner, chief economist at Nationwide, noted, “Geopolitical tensions remain high, with the conflict exerting upward pressure on energy prices and market interest rates.” The Bank of England’s warning that a further escalation could push inflation above 4% next year has added to cost-of-living pressures on households.

The rising building costs faced by UK housebuilders like Taylor Wimpey have created a perfect storm of challenges for the industry. One might expect this to lead to a glut of properties on the market, but Amy Reynolds, head of sales at London-based estate agents Antony Roberts, paints a different picture. “In our offices, prices remain flat with sensible offers being accepted,” she says. “There are more sellers than buyers, but sellers aren’t panicking – asking prices are coming down, reflecting initial overpricing and the time it takes to find the market level.”

The phenomenon of stagnant house prices speaks to a broader trend in the UK housing market: the growing gap between those who own their homes outright and those who don’t. According to government figures, people who own their homes outright have lived in the same property for nearly 24 years on average – a stark contrast to those with mortgages or renting, who tend to move more frequently.

The churning of the housing market raises important questions about social mobility and access to homeownership. As Gardner noted, “Moves between tenure types are still significant.” However, this movement is not always upwards: while nearly 200,000 households moved from private rental into ownership in 2024-25, a similar number (100,000) made the reverse journey.

NatWest chief executive Paul Thwaite expects confidence to return once clarity emerges on the conflict and policy agenda. “My expectation is that as we go through the summer and into September, one would hope that confidence would return.” For now, it seems buyers are holding back – and sellers are adjusting their expectations accordingly. As the global economy teeters on the brink of further uncertainty, UK house prices will continue to be buffeted by external factors rather than driven by any internal momentum.