National Overview 

As of June 2025, the UK housing market is showing signs of steady recovery, with average house prices across the country increasing by 1.6% compared to the previous year, bringing the average house price to £268,000. This positive trend reflects growing buyer confidence and improved affordability, with mortgage rates remaining relatively stable after recent adjustments by the Bank of England. The market is benefiting from the rebound in consumer demand, especially in areas with strong local economies and desirable locations. 

Despite some global economic uncertainty, UK buyers are proving resilient, continuing to move forward with property purchases. The housing market is particularly buoyant in the northern regions, where demand for housing is outpacing supply, resulting in noticeable price increases in several key areas. 

Regional Highlights: Strong Growth in the North 

The biggest gains in house prices have been seen in the North West and North East of England. These regions are experiencing house price growth of 1.5% and 1.4%, respectively, as demand for homes in these areas continues to increase. A combination of relatively affordable housing stock and strong local employment opportunities is making these regions increasingly attractive to buyers, especially those seeking more space for their money. The rise of flexible working arrangements has also contributed to this shift, as more people are moving away from the high-cost areas of the south in search of better value properties. 

In particular, cities like Manchester, Liverpool, and Newcastle are seeing significant demand, driving up prices as more people look to make these urban areas their home. The northern property market is expected to remain strong as demand continues to exceed supply, making it a seller's market in many regions. 

London and the South: Slower Growth 

In contrast, London and the wider South East have seen more tempered price increases. London, in particular, is experiencing slower growth, with prices rising by 1.2% annually, which is lower than the national average. This slow growth is attributed to a combination of factors, including higher living costs, global economic uncertainties, and affordability challenges in the capital. With many buyers priced out of the market, the focus has shifted towards more affordable options outside of central London, particularly in commuter belt areas like Basingstoke, Reading, and Bracknell. 

The South East has mirrored London’s slow growth, with many buyers now favouring smaller towns and cities where housing is more affordable and offers more space. This trend is expected to continue in the short term, with property prices in these regions rising at a more gradual pace compared to the northern parts of the UK. 

Property Type Trends: Buyer Preferences Shift 

In terms of property types, semi-detached and terraced houses are seeing the most significant price increases. These types of homes are becoming increasingly popular due to their affordability and versatility. Semi-detached homes have seen a price increase of 0.7%, while terraced houses have seen a rise of 0.8%. 

Meanwhile, detached homes and flats/maisonettes are experiencing slight declines, with detached houses down by 0.5% and flats dropping by 1.1%. This shift is largely due to buyer preference for more affordable and practical housing options in the wake of rising living costs. Buyers are prioritising properties that offer more flexibility and are more cost-effective, reflecting the changing economic landscape. 

Market Outlook: What to Expect in the Coming Months 

Zoopla’s forecast for the remainder of 2025 predicts a modest increase in house prices of 2.5% by the end of the year. While price growth is expected to remain subdued in the South, regions in the North will continue to outperform the rest of the UK, with strong demand ensuring that these markets remain competitive. 

The outlook for buyers and sellers is positive, but it’s crucial to keep in mind that competitive pricing will be key. Sellers should aim to price their properties competitively to attract buyers in a market that remains high in demand, especially in the north. 

 
Considering a move this summer? Let’s explore your options together 

As we approach the middle of 2025, the UK property market is showing notable signs of activity and growth, despite some ongoing economic challenges. In particular, house prices are seeing a steady rise, and buyer demand is holding strong, suggesting that the housing market continues to perform well in spite of the broader economic conditions. 

House price trends: A steady increase 

One of the key indicators of market performance is house prices, and in April 2025, the UK housing market saw a significant uptick. According to the latest data from Rightmove, the average asking price for properties coming to market increased by 1.4% in April, reaching £377,182. This marked the first monthly price record since May 2024, a period that had been marked by slight stagnation. The increase was higher than the typical April rise of 1.2%, suggesting that there is a real surge in market momentum as we head into the summer months. 

This surge in prices is particularly interesting because it reflects a broader shift in buyer behaviour. Despite rising costs and uncertainties over the global economy, prospective buyers are continuing to engage with the market. In fact, new buyer demand is running 5% ahead of the same period last year, indicating that many buyers are still motivated to move forward with property purchases. 

Mortgage rate adjustments: A positive shift 

In an effort to combat inflation, the Bank of England had raised interest rates in previous years. However, recent signs suggest that these rates are starting to level out, with the Bank of England announcing a rate cut from 4.5% to 4.25% in early 2025. This move is expected to have a positive impact on mortgage rates, making borrowing more affordable for many buyers. Lower mortgage rates could revive some of the demand seen in the market, particularly for first-time buyers and those looking to upgrade their homes. 

Sellers and buyers: Navigating a competitive market 

Even with the increasing prices, competition in the housing market remains high. For sellers, it is important to price properties competitively to attract potential buyers. The UK property market remains a competitive space, with potential buyers often being selective in their choices, preferring homes that offer good value for money and are well-presented. Therefore, those looking to sell their homes must ensure they present properties in the best possible light to stand out in a crowded market. 

Looking ahead: Positive outlook despite challenges 

The future of the UK housing market in 2025 looks optimistic. Despite some challenges related to interest rates, inflation, and economic uncertainty, the property market continues to show resilience. House prices are rising, buyer demand remains strong, and key indicators suggest a steady recovery as we move into the second half of the year. 

For buyers, this could be an ideal time to enter the market, especially with the recent reduction in mortgage rates. For sellers, pricing correctly and preparing homes to meet buyer expectations will be crucial for success. 

 Considering a move this summer? Get in touch and let’s explore your options together.