Key Takeaways: UK House Prices – May 2025

• The average asking price of a home has reached a new record, now just under £380,000
• The number of homes for sale at this time of year remains at a decade high
• New buyer demand has slowed to 4% above last year, while the number of new sellers is up by 14%
• A widely anticipated second Bank Rate cut this year could lead to further mortgage rate reductions

The spring property market is traditionally one of the busiest periods for home movers, and May has seen a new asking price record every year since 2020.

This May is no exception, with prices rising by 0.6% (£2,335) to an average of £379,517. However, this marks the smallest price increase at this time of year since 2016.

In April 2025, the average asking price was £377,182, representing a monthly increase of 1.4% and an annual rise of 1.3%. By comparison, the average asking price in May 2025 is £379,517, reflecting a monthly increase of 0.6% and an annual growth of 1.2%.

Although this is another record high for May, the consistent pattern over the past five years suggests this is largely influenced by seasonal factors. This is further supported by a slowdown in new buyer demand.

You can view average property prices across the UK in our full House Price Index report for May and check the latest sold prices in your local area.

Drop in Buyer Demand Following Stamp Duty Rise

While asking prices continue to rise, the volume of homes available for sale remains at a ten-year high, giving prospective buyers greater choice and limiting further price inflation.

Following a busier than usual March, when many buyers in England rushed to complete transactions ahead of the stamp duty changes, buyer demand fell by 4% in April compared to the same period last year. This is the first instance in 2025 where demand has dipped below last year’s levels.

Despite this, demand year to date remains 3% above 2024’s figures, and there are already signs of recovery in May. The number of agreed sales is currently running 5% higher than the same time last year, suggesting that motivated buyers are still responding to well-priced properties.

Listings Reach a Decade High

The number of new properties being listed is now 14% higher than in May 2024, pushing the supply of homes to its highest level in ten years.

With more sellers than buyers currently active, those looking to sell are facing increased competition and must adopt more realistic pricing strategies. Buyers now have more options in many areas, which means properties that appear overpriced compared to similar homes may be overlooked entirely. The modest price increase this May reflects a market that is beginning to tilt in favour of buyers.

What’s Happening with Mortgage Rates?

Mortgage interest rates have fallen compared to this time last year, and a second cut to the Bank of England’s base rate is widely expected later this year, which could lead to more competitive mortgage deals for borrowers.

Currently, the lowest two-year fixed mortgage rate stands at 3.72%, a notable drop from 4.75% a year ago. When combined with wage growth that continues to outpace house price inflation, this should help sustain buyer confidence and improve affordability in the coming months.

While significant rate reductions are not expected, any decrease will support buyer sentiment. With more properties on the market and a slight dip in demand, sellers need to take a strategic approach. Understanding local market conditions and setting a competitive asking price will be essential to attracting serious buyers and securing a sale.

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