Merryn Talks Money Downward Spiral: UK House Prices on the Slide
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Jul 23, 2025 Hosts dive into the current downturn in UK house prices, discussing record drops and the widening gap between asking and achieved values. They highlight significant declines in central London, where premium properties have plummeted over 20% since 2014 due to various economic pressures. The impact of rising interest rates is assessed, especially for American buyers facing hefty stamp duty. Additionally, discussions on the effects of build cost inflation reveal challenges in post-Covid home renovations in market-saturated areas.
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UK House Prices Plunge in July
- UK house asking prices fell by the largest amount ever recorded in July, signaling a major market shift.
- Annualized house price growth is close to zero, indicating flat or slightly falling prices after inflation.
Market Adjusts to Higher Interest Rates
- Housing market activity has normalized with transactions returning to normal levels despite higher interest rates.
- Prices stagnate as the market adjusts to affordability constraints from interest rate rises.
London Prime Property Value Stagnation
- Prime central London property values have dropped over 20% and remained stagnant since around 2014.
- Capital flight, Brexit, and tax changes contributed to the prolonged price decline in this segment.