What’s happening with UK house prices? Latest property market moves and forecasts
Stamp duty changes put the brakes on the property market earlier this year, but buyers could now be starting to return. What does it mean for house prices?
House prices have had a wobble in the wake of stamp duty changes, but experts believe things could start to pick up as the year progresses.
Buyers and home movers rushed transactions through in the first three months of 2025 before the tax-free allowances dropped, resulting in a busy start to the year, but this has restricted market activity more recently.
Annual house price growth looks more robust. Prices are still 2.1% higher than they were a year ago, according to Nationwide, bringing the average UK property to £271,619. Halifax reports a slightly higher annual growth rate (2.5% in June), bringing the average price to £296,665.
“We expect activity to pick up as the summer progresses, despite ongoing uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive,” said Nationwide’s chief economist Robert Gardner.
“The unemployment rate remains low, earnings are rising at a healthy pace in real terms, household balance sheets are strong and borrowing costs are likely to moderate a little if interest rates are lowered further in the coming quarters, as we and most other analysts expect.”
Survey data from the Royal Institution of Chartered Surveyors (RICS) supports this view, with respondents reporting an increase in new buyer enquiries in June. It is the first month this metric has turned positive since December 2024.
Despite this, a glut of supply could keep house price growth in check, with 14% more homes on the market than a year ago, according to property listing site Zoopla. This is restricting the rate of house price growth, particularly in expensive areas.
“In London and the South East and South West regions of England, the number of homes for sale is 16-19% higher than a year ago. At the same time, house prices are barely rising – by less than 0.5% over the last year,” said Richard Donnell, executive director of research at Zoopla.
“In contrast, regions in the North of England, the West Midlands and Scotland have registered only a modest change in supply, creating an element of scarcity. This is supporting above-average price inflation of 2-3%.”
What do official house price figures show?
The most authoritative source on house prices is HM Land Registry. It covers more of the market than Halifax and Nationwide, because it includes cash purchases as well as those financed through a mortgage.
The main problem is that Land Registry data is published with a six-week time lag, meaning other sources can give a better snapshot of current market conditions.
The latest report covering April shows prices plunged 2.7% on a monthly basis as stamp duty changes kicked in. Prices were still 3.5% higher on an annual basis, bringing the average property to £265,000, but this was half the annual growth rate recorded the month before (7% in March).
It is perhaps unsurprising given property transactions surged in the lead up to stamp duty changes before dropping off a cliff edge after the deadline passed. Transaction volumes decreased by 63.5% between March and April, according to HMRC data.
Things should normalise as the tax changes recede further into the background, provided market conditions remain supportive. Although transaction volumes were still down 12% year-on-year in May, they were 25% higher than in April.
Regional house price variations
Naturally, there are regional variations when it comes to house price growth.
Among the UK nations, prices are growing at the fastest rate in Northern Ireland (9.5% annually), according to the latest report from HM Land Registry. Scotland comes in second (5.8%), followed by Wales (5.3%) and England (3%).
Of the English regions, the North East is experiencing the fastest growth (6.4%). The South West saw the lowest level at 0.9%.
Using the “house prices in your area” report from the Office for National Statistics can help you understand how prices have changed in your borough or local authority area.
A recent special report from Nationwide also found that rural areas have outpaced urban areas in recent years. Between December 2019 and December 2024, house prices in predominantly rural areas increased by 23%, compared with 18% in areas that are largely urban.
“The pandemic had a significant impact on housing demand during 2021 and 2022, with a shift in preferences towards more rural areas, particularly among older age groups. Whilst these effects have now faded, less urban areas have continued to hold the edge in terms of house price growth,” said Gardner at Nationwide.
Are property asking prices going up?
Asking prices are a useful barometer for market sentiment as it currently stands. These snapshots tend to be published only a few weeks after the data was recorded. The drawback is that asking prices don’t necessarily reflect the final sold price.
Rightmove data shows asking prices dropped by 0.3% in the first few weeks of June – an unusual dip for this time of year – as new sellers lowered their price expectations against a competitive market backdrop.
London and other expensive southern regions saw the largest price drops, according to the property listing site. They are more exposed to stamp duty changes and have seen bigger increases in the number of homes for sale.
“It’s an encouraging market for those looking to buy, with a very good choice of homes for sale, which also means they have good negotiating power,” said Colleen Babcock, property expert at Rightmove.
“Some buyers with a home to sell in the current high-supply market may achieve a lower price on their own sale, but could look to offset that by negotiating a comparable discount on their purchase.”
Will house prices rise in 2025?
Despite an uncertain economic backdrop, experts are cautiously optimistic about the property market going forward. Real estate consultancy Knight Frank recently upgraded its forecast from 2.5% to 3.5% for annual house price growth in 2025. Savills is predicting 4%.
“We think there will be modest single-digit house price growth by the end of the year but if you are planning to sell over the next few months, asking prices will need to reflect the fact it is very much a buyer’s market,” said Tom Bill, head of UK residential research at Knight Frank.
Regional variations are likely, with prices forecast to rise more rapidly in the north than the south. Savills expects growth of 5% in the North West, the North East, Scotland, and Yorkshire and the Humber. Prices in the East of England and the South West are forecast to increase by 2.5%.
“Housing market activity and house price inflation are currently strongest in areas where homes are more affordable. In broad terms, this covers most areas outside the southern regions of England,” said Donnell at Zoopla.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Katie has a background in investment writing and is interested in everything to do with personal finance, politics, and investing. She enjoys translating complex topics into easy-to-understand stories to help people make the most of their money.
Katie believes investing shouldn’t be complicated, and that demystifying it can help normal people improve their lives.
Before joining the MoneyWeek team, Katie worked as an investment writer at Invesco, a global asset management firm. She joined the company as a graduate in 2019. While there, she wrote about the global economy, bond markets, alternative investments and UK equities.
Katie loves writing and studied English at the University of Cambridge. Outside of work, she enjoys going to the theatre, reading novels, travelling and trying new restaurants with friends.
What is a trust – and should you use it to avoid inheritance tax?
What will be the consequences of Donald Trump’s "One Big Beautiful Bill"?
