Rental market pressure continues
House prices rose by 3.5% in the year to April 2025, reaching an average of £265,000, according to figures released by the Office for National Statistics (ONS) today.
The annual growth rate has slowed from 7% in the 12 months to March, marking the first deceleration in price inflation since December 2023.
The decline in growth coincided with a fall in prices between March and April 2025. The slowdown followed changes to the Stamp Duty Land Tax (SDLT), which came into effect on April 1 in England and Northern Ireland. The new rules increased the tax for property purchases above £125,000 for non-first-time buyers.
Property transaction volumes spiked in March before declining in April, as buyers rushed to finalise purchases ahead of the tax changes. HM Revenue and Customs reported an unusual surge in sales in March, followed by a drop the following month. A similar trend was seen in late 2021 ahead of previous SDLT amendments.
In England, the average house price reached £286,000 in April 2025, up 3.0% (£8,000) compared to a year earlier. This was down from a 7.3% increase in March. Wales recorded an average price of £210,000, representing a 5.3% annual rise — an increase from the 4.3% growth noted the previous month.
Scottish property prices averaged £191,000 in April, up 5.8% from April 2024, slightly above the 5.2% gain seen in March. In Northern Ireland, the average price was £185,000 for the first quarter of 2025, up 9.5% (£16,000) from the same period in 2024.
Average UK house prices increased by 3.5%, to £265,000 in the year to April 2025, down from 7.0% in the 12 months to March 2025.
— Office for National Statistics (ONS) (@ONS) June 18, 2025
Average UK private rents increased by 7.0% in the year to May 2025, this is down from 7.4% in April 2025.
➡️ https://t.co/41uQW9sSC8 pic.twitter.com/abCD6dgRPG
Atom bank’s head of mortgages, Richard Harrison, noted a shift in market dynamics, with higher inventory levels possibly easing the way for buyers.
“Rightmove has reported the number of homes for sale has hit its highest level in a decade, and that competition among vendors is leading to lower asking prices,” Harrison said. He added that stronger buyer activity and falling mortgage rates were encouraging signs for the market.
“Mortgage rates are also a cause for optimism among buyers... average fixed rates have fallen for four straight months,” Harrison said, while calling on lenders to broaden access to finance for all buyer types.
Nick Leeming, chairman of estate agency Jackson-Stops, said the uptick in prices reflects continued buyer interest, partially driven by demand ahead of the March stamp duty deadline. However, he warned that inflation could slow the expected fall in mortgage rates, impacting affordability.
“Buyers are hesitant amid mounting household financial pressures and wider economic uncertainty,” Leeming said.
Meanwhile, the ONS reported that private rents continued their upward trend, rising by 7.0% to an average of £1,339 in the year to May 2025. This was slightly lower than the 7.4% growth seen in April.
Across England, rents increased to £1,394 (7.1%). Wales saw an 8.5% rise to £799, while Scotland's average climbed 4.5% to £999. In Northern Ireland, rents rose 7.7% to £848 over the year to March.
Regionally in England, rent inflation was highest in the North East at 9.7% and lowest in Yorkshire and The Humber at 3.7%.
Alex Upton, managing director of specialist mortgages and bridging at Hampshire Trust Bank, said the continued rise in rents is expected given the supply-demand imbalance.
“Supply is still struggling to meet demand, and competition for well-located rental properties remains high,” she said. “That pressure is unlikely to ease in the near term. New housing delivery may help, but even if government targets are met, it will take time for that stock to reach and influence the rental market.
“In the meantime, rental supply could contract further. Some landlords are reconsidering their position in light of the Renters’ Rights Bill and the likely cost of future retrofit requirements. It would not be surprising to see rental records continue to be broken this year.
“But where there is pressure, there is also change. Many professional landlords are already adjusting their strategy. We are seeing greater focus on resilient assets such as semi-commercial properties, HMOs and refurbishment projects aimed at delivering long-term value. The most effective landlords are positioning their portfolios with the future in mind.
“This is where brokers and lenders need to play their part. Landlords will require flexible, pragmatic funding to deliver those strategies. The market is shifting, and the brokers who understand those shifts and help clients act on them will be key to maintaining momentum.”
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