Interest rates and inflation: Holding steady for now

Following the Bank of England’s decision in early May to reduce the base rate by 0.25 percentage points to 4.25%, it chose to leave the rate unchanged at its latest meeting in June. This decision signals a period of watchful waiting, as the Bank continues to assess the economic landscape before making further moves.

Looking at inflation, the latest figures show that headline inflation (CPI) remained stable at 3.4% in May, following a revised figure of 3.4% in April. Similarly, core inflation, which excludes volatile items like energy, also saw a dip to 3.5% in May, from 3.8% in April.¹ While these movements are encouraging, both measures still remain above the Bank’s 2% target. The MPC will meet several more times this year (August, September, November, and December) to review the base rate, with future decisions heavily dependent on how inflation trends continue to unfold.

Competitive mortgage deals are still around

The BoE’s May rate cut, coupled with a general stabilisation of swap rates – which influence how lenders price fixed-term mortgages, has continued to support a competitive environment for mortgage deals. While the ‘mini price-war’ that happened a couple of months ago has settled, many lenders are still offering attractive rates, with sub-4% deals remaining available for those with significant equity or deposits. This continued stability is positive news for borrowers, reflecting a more predictable lending landscape.
It’s always reassuring to see lenders providing more varied options in the market, whether you’re a first-time buyer or looking to remortgage. However, the importance of personalised advice cannot be overstated. We always recommend speaking to a qualified mortgage broker. They can help you navigate the nuances of different products and criteria, ensuring you secure a deal that’s truly right for your financial circumstances.

House price data shows moderate growth

For anyone navigating the housing market, understanding current house price trends is crucial. However, getting a clear picture isn’t always straightforward, as various reports track property values from different angles – by region or even at different stages of a sale. By looking at these key data sources together, you can build a comprehensive view of how prices are truly moving.
To help you gain the clearest insights, we keep a close eye on updates from the UK House Price Index (UK HPI), Rightmove, and lender-specific data like the Nationwide House Price Index. Here’s what their latest findings mean for you as a buyer:

  • UK House Price Index (UK HPI): This is the most official measure as it is based on completed sales. The latest figures available (for April 2025) show the average UK home price at around £265,000. While the annual growth is positive at 3.5% year-on-year, there was a 2.7% monthly decrease from March to April.² This suggests a slight cooling in actual transaction values following stronger growth earlier in the year.
  • Rightmove House Price Index: This index tracks asking prices (what sellers are currently listing their homes for) on its site. In June 2025, the average asking price saw a small monthly dip of 0.3% to £378,240.³ Interestingly, Rightmove noted this small dip in asking prices came during what was also reported as the “busiest month for sales agreed since March 2022,” with buyer activity significantly ahead of last year. This indicates strong underlying demand, even if initial asking prices are being adjusted.
  • Nationwide House Price Index: Using Nationwide’s own lending data, this index provides a timely insight into market movements. The latest figures for May 2025 showed a 0.5% monthly increase in house prices, bringing year-on-year growth to 3.5%.⁴

What this could mean for you 🔍

  • The slight dips in price data suggests that you may have room to negotiate your offer.
  • Although there are some price adjustments, sales activity is still strong with many buyers actively buying homes.
  • House price movements vary by region and property type, so what’s happening nationally might not be the case in your local area.

Mortgage approvals pick up

If you’re getting ready to buy or shopping around for a mortgage, it can be helpful to understand how many mortgages are being approved each month. The most recent Bank of England data indicates that UK mortgage approvals increased to 63,030 in May 2025,⁵ up from 60,660 in April. This rise suggests buyers are feeling more confident and market activity has increased, possibly driven by the recent stability in interest rates and easing inflation.

What this could mean for you 🔍

  • You might find there’s slightly more competition for properties, so being prepared with your finances is key.
  • An uptick in approvals can indicate a healthier market, meaning more sellers might be encouraged to put their homes up for sale as activity increases.

1 Source: Office of National Statistics (ONS) CPI Annual Rate of Inflation
2 Source: GOV.UK Land Registry (UK House Price Index for April 2025)
3 Source: Rightmove House Price Index for June 2025
4 Source: Nationwide House Price Index for May 2025
⁵ Source: Trading Economics, UK Mortgage Approvals for May 2025