The housing market has defied expectations this summer, with increased buyer demand, more property sales, and a record number of homes listed for sale. Despite this surge in activity, house prices have remained relatively stable, showing only modest growth.

Key Highlights at a Glance

• Buyer demand, agreed sales, and available homes for sale are all at unexpectedly high levels.
• Increased activity is supported by recent changes to mortgage affordability rules.
• Annual house price growth stands at just +1.3%.
• Our 2025 house price growth forecast has been revised from +2% to +1%.

Average UK House Prices – Latest Update

As of June 2025, the average UK house price is £268,400. This reflects a modest year-on-year increase of £3,350, or 1.3%.

How Prices Compare by Property Type

Here's how average prices and yearly changes compare across property types:

Flats and Maisonettes

June 2025 average: £191,800

Annual change: -£1,640 (-0.8%)

Terraced Houses

June 2025 average: £238,100

Annual change: +£3,870 (+1.7%)

Semi-Detached Houses

June 2025 average: £276,200

Annual change: +£6,230 (+2.3%)

Detached Houses

June 2025 average: £450,400

Annual change: +£3,690 (+0.8%)

Unseasonal Summer Surge in Housing Market Activity

Unlike typical summer slowdowns, this year has brought a boost in property market activity across the UK:

• Buyer demand is up 11%
• Agreed sales are up 8%
• There is a record number of homes listed for sale

This trend is widespread across all UK regions, driven in part by buyers keen to complete purchases before school holidays begin. Another key driver is a change in how lenders assess mortgage affordability. Buyers can now borrow up to 20% more than three months ago—without any change to income or interest rates.

Why Higher Activity Isn’t Pushing Prices Up Faster

Despite stronger activity, house prices are rising slowly, with annual growth now at +1.3%.

This is faster than in June 2024 (+0.4%), but slower than six months ago (+2.1%).

The main factor keeping prices in check is the 12% increase in available homes, creating a buyers’ market where competition puts a ceiling on asking prices.

Where Are House Prices Growing the Fastest?

Growth is strongest in Wales, Scotland, and the North of England, where annual increases range between +2% and +3%.

Northern Ireland leads with +6.1% growth, driven by a lower starting point in prices.

In contrast, southern England is seeing much slower growth, from +0.2% in London and the South East to +0.8% in the East of England.

The temporary boosts from lower stamp duty and steady mortgage rates in 2024 have now largely faded.

The Impact of Higher Stamp Duty Costs

Stamp duty changes introduced in April have placed additional financial pressure on buyers.

• 83% of homeowners now pay stamp duty, up from 49% before April 2025.
• The average extra cost per transaction is around £2,500.
• As stamp duty is based on property value, the effect is more pronounced in southern England, where property values are higher, slowing down growth in these regions.

Advice for Sellers in a Buyers’ Market

Sellers in southern regions need to price competitively:

Compared to July 2024, there are now:

• 19% more homes for sale in London
• 16% more in the South East and South West

With increased supply, buyers are more selective and likely to skip overpriced listings. Homes are still selling at a record pace, but success hinges on realistic pricing.

What’s Next for the UK Housing Market?

Looking ahead, the outlook for the rest of 2025 includes:

• Mortgage rates expected to remain between 4–5%
• Steady levels of sales activity
• 5% more home sales compared to 2024
• House prices predicted to rise by +1% over the year

While many anticipated mortgage rates would fall by mid-year, stubbornly high inflation has kept rates stable. Nonetheless, changes to mortgage affordability rules are fueling demand even without rate cuts.

Final Word

The UK housing market in 2025 is showing balance: more people are buying and selling, but price growth is modest, and affordability is improving. The revised +1% house price forecast reflects higher-than-expected supply and steady but unspectacular demand.

This modest growth may actually prove beneficial, creating a sustainable and accessible market, as long as confidence remains amongst buyers and sellers.

Whether you are looking to buy or sell your property, speak with our experienced team on 0116 266 9977.