Asking prices for homes in the UK dropped significantly in June, marking the largest decline since 2011. In June 2025, there was a 0.3% fall in prices compared to the previous month, which is unusual since there is usually a 0.4% increase during this time. The yearly rise in house prices came in at 0.8%, the smallest increase since August 2024. Before this, prices had risen by 1.2% annually. Currently, there are more homes available for sale than in the past ten years. Recent stamp duty hikes in England might be influencing new sellers’ pricing strategies. More competitive pricing is helping boost sales. The number of agreed sales has hit its highest level in over three years. At the start of the new week, the exchange rate for GBP has changed little. These early figures signal a subtle shift in the property market and its wider effects. The decrease in asking prices during June, typically a strong month for sellers, illustrates growing caution. Families often look to move in June before the new school year begins, so a 0.3% drop against seasonal trends indicates buyer hesitance. The annual growth of 0.8%, down from 1.2%, reveals a tightening in valuations and how much sellers are willing to negotiate. While sellers were previously aiming high, the surge in available homes—now at a decade-high—has begun to test their confidence. More properties are being listed, but sellers are now pricing them more realistically. Changes in stamp duty seem to have only slightly influenced new listings, with pricing adjustments being moderate. However, this pressure may impact valuations more directly in the coming months, especially as summer progresses. Sellers easing into tax-related costs could create pricing mismatches that lenders and investors will need to consider. On a positive note, sales activity is increasing, with more homes actually changing hands. Realistic pricing may be encouraging hesitant buyers to take action. Transaction levels have now risen to their highest since early 2021. The combination of motivated sellers and steady demand, particularly in properties under £500,000, could stabilize areas that seemed fragile before. From our perspective, this situation affects financial instruments sensitive to local activity. With the housing market adjusting expectations, it becomes important to monitor associated sentiments around monetary policy. This leads us to the current stagnation in sterling. There hasn’t been a strong movement reflecting this housing moderation—at least not yet. GBP remains relatively stable against major currencies, showing little decisive change. We see this steady trend as a pause before clearer economic signals emerge. Short-term traders might already be anticipating one or two moves from the Bank of England. For any significant shifts to happen now, we’d likely need data from impactful events like core inflation, wage growth, or unemployment changes. As house prices soften, more homes enter the market, and there isn’t a direct push on sterling, it’s essential to stay flexible. New information isn’t being aggressively factored in, but this could change quickly. Observing how implied volatility behaves—whether it settles or struggles—will provide insights ahead of the English housing market.

here to set up a live account on VT Markets now