Housing Market Outlook

How is the housing market faring so far in 2025?

House prices update

House price growth slowed to 2.1% in June, down 0.8% month-on-month. Performance varies significantly depending on the region, with Northern Ireland seeing the strongest growth of 9.7%. East Anglia was the weakest area, where house prices only increased by 1.1% annually.

House prices are increasing at the fastest rate in areas with the most affordable properties. In regions where the average home is below £200,000, annual house price growth is 2.7%. On the other hand, prices are falling by 0.2% in areas where the average property is above £500,000.

A buyer’s market

The rise in supply of homes seems to have contributed to the slowdown in house price growth. Buyers have greater choice, with 14% more homes for sale than this time last year. In regions where supply has increased the most (London, the South East and South West), house prices have risen annually by no more than 0.5%. However, in the North of England, the West Midlands and Scotland, where supply has only marginally increased, prices have gone up by 2-3%.

As the current market favours buyers, sellers have been encouraged to be realistic when pricing their properties. Richard Donnell at Zoopla said, “Keep in mind that you may have to wait longer to achieve your desired price if it’s not in line with your local market.”

It’s not all bad for sellers, though. Despite high supply, sales are being agreed at the quickest rate in four years, with Rightmove suggesting that ‘spoiled-for-choice buyers are still being tempted by the right property at the right price’.

How long to sell?

The average home takes 45 days to find a buyer, roughly the same as last year. Time taken to sell varies by the region, with the North East the quickest at 35 days. Meanwhile, it takes at least 50 days in all southern regions of England, where there is a greater supply of homes.

Regardless of location, once a home is taken off the market it can then take up to 4-5 months to complete a purchase.

What’s to come?

Many lenders have eased their affordability criteria, so mortgage holders can afford to borrow 20% more than they could at the start of 2025. This should boost transactions in the second half of the year and into 2026. Plus, the total number of sales is expected to increase by 5% over the course of 2025. Annual house price growth is expected to remain modest at 1-2%.

Robert Gardner, chief economist at Nationwide, commented, “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.”

Your home may be repossessed if you do not keep up repayments on your mortgage.

Young homeowners aren’t protected

Over half (54%) of 18 to 34-year-old homeowners have life insurance, however only 15% of this group understands income protection.

A survey has found that 30% of young borrowers have not got any protection insurance in place. It is therefore concerning that 14% believe they would have difficulties keeping up with their mortgage payments as soon as they became unable to work due to injury or illness. Meanwhile, 57% of 18 to 34-year-olds would struggle within six months of losing income.

When asked what they would do in the event of illness or injury, 29% of young homeowners said they would attempt to take on additional work, while a quarter (23%) would reduce contributions to their savings or pensions pot.

Paula Higgins, CEO at HomeOwners Alliance, commented, “For young homeowners, the stakes are high: many have stretched to afford their property and their financial resilience is often still being built.”

No one likes to think about being affected by illness or injury, but going without essential protection could put you and your loved ones in a vulnerable position. Don’t leave it up to chance, talk through your options with us.

As with all insurance policies, conditions and exclusions will apply. Your home may be repossessed if you do not keep up repayments on your mortgage.

Sales agreed on the rise

The housing market seems to be regaining momentum, as sales are being agreed at the fastest rate in four years.

The number of sales agreed was up 6% annually in June, which coincided with the stock of new property listings going up by 14%. This indicates that buyers are regaining confidence, with demand rising by 7%.

Executive Director at Zoopla, Richard Donnell, commented, “The number of buyers and sellers agreeing home sales continues to increase year-on-year, demonstrating a continued desire of more households to move home in 2025.”

Hoping to move by the end of year? Whether you’re upsizing, downsizing, or getting on the property ladder for the first time, we’re here to help with all your mortgage needs.

Your home may be repossessed if you do not keep up repayments on your mortgage