"The market continues to surprise. While headlines paint a gloomy picture, the reality on the ground is far more nuanced"
- Amy Reynolds - Antony Roberts Estate Agency
UK property prices rose by 3.9% in the 12 months to May 2025, bringing the average house price to £269,000 and representing a £10,000 increase compared to May 2024, according to this morning's figures from ONS.
The rate of annual house price inflation accelerated slightly from the revised figure of 3.6% in April 2025. On a monthly basis, prices increased by 1.1% between April and May, up from a 0.8% rise during the same period last year. Seasonally adjusted figures show a more moderate 0.7% increase over the month.
Among the UK nations, price growth was strongest in Northern Ireland, where house prices rose by 9.5% year-on-year to an average of £185,000 in Q1 2025. In Scotland, prices increased by 6.4% to an average of £192,000, while Wales saw a 5.1% rise to £210,000. England recorded a 3.4% annual increase, with the average property priced at £290,000.
Regional data within England revealed variation in growth. The North East recorded the strongest annual increase at 6.3% in the 12 months to May 2025. In contrast, the South West saw the weakest growth, with prices rising by just 1.9%.
The UK house price index for May 2025 stood at 103, using January 2023 as the base period (index = 100). This marks continued upward movement in overall pricing, albeit at a more moderate pace compared to earlier peaks.
Richard Donnell, Executive Director of Research at Zoopla comments, "The rate of house price inflation recorded by the ONS continues to pick up the impact of the stamp duty holiday, while other measures record the rate of price growth slowing more quickly.
"Lower, single-digit house price inflation is positive for the market as there is just enough price growth to encourage sellers to list their homes and buyers to make offers on property without the fear that prices may fall or suddenly surge higher. We expect price inflation to remain low as there are the most homes for sale in seven years, averaging 37 per estate agent."
Nathan Emerson, CEO of Propertymark, said, “In some respects, rising house prices show 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. 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.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “The market continues to surprise. While headlines paint a gloomy picture, the reality on the ground is far more nuanced. June was a record month for us in terms of newly-agreed deals, and July has started strongly for exchanges. That said, fall-throughs were also high in June – it’s very much a tale of two halves.
“We’re seeing two distinct types of buyers. Some are taking a long-term view: they’ve found a home they want to stay in for the next decade, don’t expect stamp duty to get cheaper, and are prepared to pay today’s prices, which are still below 2021 levels. Then there are those who remain convinced that prices will fall further and are holding off, even when they’ve found the right property.
“In domestic markets such as Southwest London, where people are buying homes rather than investments, prices have dipped slightly from the peak but remain resilient. Demand is supported by real need, and many buyers have emerged from the past few years in a strong financial position. At the top end, we’re currently registering a significant number of high-net-worth applicants – many with budgets of £7m or more and who are very serious about buying their next home.”
Tomer Aboody, director of specialist lender MT Finance, says: “Further market confidence has been shown with higher transaction levels, mortgage approvals and prices. This is a consequence of lower borrowing costs, improving buyer affordability and enabling them to proceed with their purchases.
“Although these matrices appear positive, transaction volumes still trail behind where they were last year amid fears that Reeves’ budget, which has hit businesses and borrowers hard, will continue to have a negative effect going forward.
“Here’s hoping that the UK housing market stays strong and we see signs of further confidence as 2025 plays out.”
