Market shows resilience despite policy changes and affordability concerns
UK house prices rose by 3.9% in the year to May 2025, reaching an average of £269,000, according to latest figures from the Office for National Statistics (ONS), marking a slight acceleration from the 3.6% annual price growth recorded in April.
England’s average house price climbed to £290,000, up 3.4% year-on-year, while Wales saw a 5.1% increase to £210,000. Scotland recorded a 6.4% rise to £192,000, and Northern Ireland’s average reached £185,000 in the first quarter, up 9.5% from the previous year.
Within England, the North East posted the highest annual house price inflation at 6.3%, while the South West saw the lowest at 1.9%. London’s annual growth eased to 2.2% in May, down from 4.6% in April.
“In some respects, rising house prices shows as an indicator of growth in the general housing market and stability in some people’s finances as some banks are now cutting their mortgage rates to further stimulate the housing market,” said Nathan Emerson, CEO of Propertymark, commenting on the latest UK House Price Index.
“However, there is still more work to do to boost Britain’s housing market and make homeownership a realistic aspiration for those looking to step onto the property ladder for the first time. There are many reports suggesting that the Stamp Duty hikes commencing from April this year are having a negative effect as some people are paying between £6,000-£12,000 more in charges, and there are even calls for more flexible Stamp Duty payment options too.
“Though this tax was increased to help balance the UK’s finances, other reports suggest these increases are deterring aspiring homeowners. The UK government should listen to those working in the industry who are noticing the negative consequences this policy is having.”
Hamza Behzad, business development director at mortgage technology provider finova, said the market remains resilient. “As the market steers into the second half of 2025, the wider UK housing market has once again flexed its muscles, remaining strong despite an everchanging economic landscape,” he pointed out.
“The post-tax break slowdown has not bitten into demand, and buyer activity is healthy. The much-anticipated Mortgage Guarantee scheme will further boost activity, empowering first-time buyers to make that crucial first step onto the ladder.
Average UK house prices increased by 3.9%, to £269,000 in the year to May 2025, up from 3.6% in the 12 months to April 2025.
— Office for National Statistics (ONS) (@ONS) July 16, 2025
Average UK private rents increased by 6.7% in the year to June 2025, this is down from 7.0% in May 2025.
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Meanwhile, the ONS also reported that average UK private rents rose by 6.7% to £1,344 in the 12 months to June 2025, though the rate of increase slowed from 7% in May.
England’s average rent reached £1,399, Wales £804, and Scotland £999. Northern Ireland’s average rent increased to £852 in the year to April. The North East of England saw the highest annual rent inflation at 9.7%, while Yorkshire and The Humber had the lowest at 3.5%.
“Yes, rents are still rising, but the pace has eased compared to last year,” said Alex Upton, managing director of specialist mortgages and bridging at Hampshire Trust Bank. “The mismatch between supply and demand remains the main driver, although there are early signs of the market starting to rebalance.
“The question is what comes next, particularly as the Renters’ Rights Bill moves closer. It is already prompting many landlords to reconsider their plans. Some have decided to exit the sector altogether, which only increases pressure on available stock. Others are exploring how to adapt, whether that means rebalancing their portfolios, investing in improvements or preparing for a more regulated environment.
“For brokers, this is a period when clear advice matters. Landlords will need support to understand the practical implications of the bill and to secure funding strategies that fit the changes ahead.”
Upton added that over time, the conversation has to move beyond rent levels. “Increasing housing delivery is important, but it must be the right kind of supply,” she said.
“New homes need to meet the needs of tenants as well as buyers. A healthy housing market depends on a rental sector that remains accessible and affordable, and achieving that will require planning, targeted investment and a clear commitment to delivery.”
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