House prices fell by 0.8% in June, which marks the biggest monthly decrease in property prices in over two years. This is in stark contrast to last month, when house prices increased by 0.4% instead. According to the latest figures from Nationwide, the average property cost £271,619 in June 2025, down from £273,427 in May 2025.
Year on year, house prices increased by 2.1% in June 2025, while they saw a 3.5% increase in May 2025. Robert Gardner, Nationwide's Chief Economist, added: "Prices declined by 0.8% month-on-month, after taking account of seasonal effects. The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April."
The latest fall in prices is the biggest in over two years, though March and April also saw drops in house prices this year (-0.1% and -0.6% respectively).
The fall in prices is part of a wider pattern across the last quarter. Nationwide data show that most regions experienced a "modest slowdown" in house prices over the last three months. Mr Gardner added: "Across England overall, prices were up 2.5% year-on-year, a slight softening from the 3.3% annual rise seen last quarter. The north-south divide in house price performance narrowed during the quarter. Average prices in Northern England were up 3.1% year on year, whilst those in Southern England were up 2.2%."
Property price increases varied based on property type, too. Terraced houses as a whole saw the biggest percentage rise over the last 12 months, with average prices up 3.6% year on year. Flats, however, saw a further slowing in annual price growth down to 0.3% from 2.3% last quarter.
Below, we discuss what is causing the fall in house prices and whether this is likely to be temporary.
Why have house prices fallen?
Several factors are driving the recent fall in house prices. These include affordability hurdles, the aftermath of the changes to stamp duty in April, and even geopolitical tensions, which remain an ever-present threat.
First-time buyers in particular are likely to face issues with affordability as mortgage rates, and by extension, monthly repayments remain significantly higher than they were a few years ago. Coupled with significant upfront costs which have only been exacerbated by the recent changes in stamp duty rules, it's easy to see why house prices have suffered a slight dip.
As a reminder, the government lowered the stamp duty thresholds in April, after temporarily raising them in 2022. Prior to April, buyers owed no stamp duty on properties valued up to £250,000, while first-time buyers only had to pay stamp duty on properties costing more than £425,000. From April onwards, buyers now need to pay some stamp duty on properties costing more than £125,000 (or £300,000 for first-time buyers). You can find out the exact tax rates in our stamp duty explainer article.
The significant changes in the stamp-duty thresholds have played a role in the softening of the housing market. In April, Nationwide reported house prices fell by -0.6% while in May they rose marginally by 0.4% only to see a significant -0.8% dip in June.
The time of year itself could also be causing a downward pressure on prices. Rosie Hooper, chartered financial planner at Quilter Cheviot, added: "We are not far away from the summer holidays starting, which can be a quieter period for the housing market, as many households prioritise holidays over house hunting. With schools off and professionals away, activity often slows across the board, from viewings to mortgage processing, leading to a natural lull in transactions. This may already be weighing on house prices, and we could see further downward pressure in the coming months."
But, she stressed, seasonal dips are "nothing new" and not necessarily indicative of a permanent trend.
Will house prices continue to fall?
Experts suggest that the fall in house prices may be temporary. Although the market naturally slows during the summer months, it's likely it'll start to recover again in the Autumn period.
Rosie Hooper, chartered financial planner at Quilter Cheviot, added: "While the market is still digesting the stamp duty reforms in April, they will soon become the norm, and their immediate impact will fade into the rear-view mirror. First-time buyers and movers alike are already beginning to adjust to the new thresholds, which should help stabilise activity over the coming months."
It's worth keeping in mind that the increase in stamp duty reforms isn't new. Buyers prior to September 2022 were already subject to the higher thresholds, and this did not necessarily have an adverse impact on property prices or the demand for housing in general.
Nationwide's Robert Gardner said: "We still expect activity to pick up as the summer progresses, despite ongoing economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive.
“The unemployment rate remains low, earnings are rising at a healthy pace in real terms (i.e. after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect."
As such, while several factors are driving house prices down currently, industry experts suggest the tide will turn in the next few months. This is particularly likely if the Bank of England votes to cut the base rate again later in the summer, which could prompt further mortgage rate cuts and therefore make borrowing more affordable.
Nationwide's House Price Index in context
Nationwide's House Price Index is just one of several similar tools that ascertain how house prices are doing. Providers like Halifax and Rightmove publish their own monthly figures as well. These won't necessarily match up to Nationwide's, so it's worth taking a look at the market as a whole when making decisions.
For example, Rightmove recorded a -0.3% drop in June, which still represents a fall in property prices but is far less steep than the drop reported by Nationwide. For a fuller picture, we'd recommend you take a look at our article on what is going to happen to house prices. You'll find a comprehensive analysis of the UK property market as a whole to help you decide whether now's the right time to buy (or sell) your property.
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