UK Property Market June 2025

Posted on 03 July 2025

UK Property Market in 2025: Regional Contrasts and Cautious Optimism


The UK property market in 2025 presents a mixed picture of regional differences, steady growth, and changing mortgage conditions. As we reach the middle of the year, several key trends are shaping the market for buyers, sellers, and investors.

Market Growth

The UK property market has shown resilience throughout 2025, with house prices rising by 6.7% annually, taking the average property value to £296,000 according to official government data from March 2025. However, this growth story varies significantly across regions and price brackets.

The North East has emerged as the standout performer, with prices increasing by 9.1% in the year to January 2025, despite having the lowest average property values. This regional difference reflects a broader trend where house prices are rising more in cheaper markets (those under £200k see 2.7% growth) compared to expensive areas (between £200k-£250k see 1.9% growth).

Property type also influences growth patterns, with terraced homes rising by +3.5%, semi-detached by +2.9%, and detached by +2.8%. Flats lagged behind at +1.8%. This suggests that buyers are prioritising space and value, particularly in the post-pandemic era.

An interesting geographical divide has also emerged between urban and rural areas. Between December 2019 and December 2024, house prices in predominantly rural areas increased by 23%, compared with 18% in areas that are largely urban.

Time to Sell and Market Activity

The journey from listing to sale in the UK property market reveals significant variations in timing expectations. Recent data shows that the average time to sell in the UK housing market has fallen to 64 days, down from a peak of 78 days in January 2024. However, this figure varies considerably depending on the source and methodology used.

Why Properties Are Taking Longer to Sell

Several factors continue to extend selling times beyond these averages. More than a quarter of property sales collapsed in 2024, with buyers pulling out or failing to renegotiate the purchase price following property surveys being the most common reason for sales falling through. This creates a domino effect where sellers must restart their marketing process, significantly extending the time from initial listing to eventual sale.

Property chain issues remain a persistent challenge, with sales falling through due to problems elsewhere in the chain, survey results, financial issues, or simply buyers and sellers changing their minds. In England and Wales, parties are not legally committed to the sale until contracts have been exchanged, creating opportunities for transactions to collapse right up to the final stages.

Economic uncertainty has also made buyers more price sensitive, particularly following the Autumn Budget and ongoing uncertainty over mortgage rates. This heightened sensitivity means buyers are more likely to renegotiate or withdraw from purchases, contributing to longer selling times and increased transaction fall-through rates.

According to Zoopla, selling a house in the UK takes 175 days on average, which includes the entire process from listing to completion. This longer timeframe reflects the complete sales cycle, including the post-offer acceptance period. Breaking this down further, the marketing and offer stage typically takes 1-14 weeks after listing your property, while selling a home in the UK can take an average of 2 to 3 months generally speaking.

Regional variations also play a significant role in sale timelines. Residential properties in Great Britain sold the fastest in Scotland in January 2024, highlighting the importance of location in determining how quickly properties move from listing to sale.

The complete transaction process extends beyond finding a buyer. Once an offer is accepted, it usually takes between seven and 28 days to complete once the exchange has taken place, though the conveyancing process can introduce additional delays.

Market forecasts for the remainder of 2025 remain cautiously optimistic, with Capital Economics forecasting a 3.5% increase in property values, while Savills anticipates growth of 4%. This suggests continued steady growth rather than the dramatic surges seen in previous years.

Mortgage Funding: Easing Constraints but Ongoing Challenges

The mortgage landscape in 2025 shows signs of improvement after the challenging conditions of recent years. Banks and building societies are expected to increase mortgage lending by 11% in 2025, as affordability constraints ease with falling rates and rising real wages.

Interest rate projections indicate a gradual improvement in affordability. The Office for Budget Responsibility's most recent forecast was that average interest rates on the stock of mortgages are expected to rise from a low of 2% in 2021 to a peak of 4.7% in 2028 suggesting rates may moderate from their recent highs.

The mortgage market outlook shows cautious optimism, with expected cuts in Bank Rate and households seeing some real-terms wage growth anticipated to drive improvement throughout 2025.

The Rental Market Dynamics

The rental sector continues to evolve, with 6% fewer landlords yet a 3% growth in the number of rental properties since March 2020. This points to portfolio consolidation among landlords while maintaining overall rental stock availability.


Property Development: Challenges and Opportunities

The UK property development sector in 2025 presents a complex landscape of ambitious government targets, ongoing challenges, and emerging opportunities. The sector is undergoing significant transformation driven by policy reforms, investment commitments, and evolving market conditions.

Government Ambitions and Investment

The government has set ambitious targets for housebuilding, with a Plan for Change to build 1.5 million new homes and deliver what officials describe as "the biggest increase in social and affordable housebuilding in a generation." This commitment is backed by substantial investment, including an additional £2 billion announced in the 2025 Spring Statement to build 18,000 new social homes, addressing the widening gap between housing demand and supply.

The scope of government investment extends beyond residential housing, with plans to spend up to £775 billion on infrastructure and construction over the next decade. The National Infrastructure and Construction Pipeline (NICP) outlines 660 projects as part of this comprehensive development strategy.

Current Development Activity

Recent statistics show mixed signals in the development sector. Housing programmes delivered by Homes England resulted in 15,682 new houses starting on site and 14,295 new homes completed between April and September 2024, representing increases in both starts and completions compared to the same period in 2023. However, housing starts in the UK were 30.8% lower in 2024 than in pre-pandemic 2019, highlighting the sector's ongoing recovery challenges.

Affordable housing has shown particular strength, with 28,370 affordable housing completions in the 2024-2025 period representing a 15% increase on the previous year and accounting for 77% of all completions. This growth can be attributed to the maturing of the Affordable Homes Programme 2021 to 2026.

Regulatory and Planning Reforms

The planning system is undergoing significant reform, with the government's Planning and Infrastructure Bill promising to enable homes and key infrastructure to be built faster. The Office for Budget Responsibility has concluded that these planning reforms will bring housebuilding to its highest level in over 40 years by 2029/30, bringing the UK closer to the Plan for Growth target of 1.5 million homes.

The Future Homes Standard, set to be introduced in 2025, will require newly built homes to produce 75%-80% fewer carbon emissions than previously built homes, aligning with the government's net zero targets. While these reforms offer opportunities for faster project approvals, they also present challenges as firms adapt to new processes and potentially tighter deadlines.

Development Challenges

The sector faces several persistent challenges in 2025. Construction costs remain elevated, with building materials including steel, concrete, timber, and glass continuing to experience price fluctuations. Supply chain issues and rising costs present ongoing obstacles for developers, requiring innovative approaches to maintain project viability.

Compliance requirements are also increasing, with construction firms facing greater scrutiny that can impact project timelines and costs. Despite these challenges, the sector has opportunities to innovate and find more sustainable, efficient ways to complete projects.


Looking Ahead: Challenges and Opportunities

While the market shows positive momentum, several factors will continue to influence its trajectory. The ongoing disparity between different regions and property types suggests that location and property selection remain crucial for both buyers and investors.

For prospective buyers, the combination of steady price growth, improving mortgage availability, and regional variations creates both opportunities and challenges. Those looking in traditionally more affordable areas may find better value, while premium markets continue to show more modest growth or even price corrections.

The UK property market in 2025 is marked by steady, sustainable growth rather than the dramatic ups and downs of previous years. With mortgage lending expected to increase and affordability gradually improving, the foundations appear solid for continued stability. However, buyers and sellers must remain aware of regional differences and the ongoing economic factors that continue to influence market conditions.

Data current as of June 2025


References:

  1. Gov.uk House Price Statistics for Small Areas (March 2025)
  2. Buy Association Group - "Average time to sell is now 64 days after monthly fall" (April 2024)
  3. Zoopla - "How long does it take to sell a house?" (January 2025)
  4. SOLD.CO.UK - "What is the Average Time to Sell a House in the UK?" (January 2025)
  5. Edinburgh Letting Centre - "How Long Does It Take to Sell a House in the UK?" (September 2024)
  6. Rightmove - "When is the best time of year to sell a home?" (February 2025)
  7. Statista - "Average number of days to sell property by region UK 2024"
  8. Leaders - "What is considered a 'long time' for a house to be on the market?"
  9. Office for Budget Responsibility mortgage interest rate forecasts
  10. Property Reporter - "More than a quarter of property sales collapsed in 2024" (2024)
  11. Zoopla - "Why do house sales fall through?" (2024)
  12. Gov.uk - "Plan for Change to build 1.5 million new homes" (2025)
  13. Gov.uk - "Spring Statement 2025: £2 billion for social housing" (2025)
  14. Gov.uk - "National Infrastructure and Construction Pipeline" (2025)
  15. Gov.uk - "Homes England delivery statistics April-September 2024" (2024)
  16. Construction News - "UK housing starts down 30.8% from pre-pandemic levels" (2024)
  17. Gov.uk - "Affordable housing completions 2024-2025" (2025)
  18. Gov.uk - "Future Homes Standard 2025" (2025)
  19. Construction Industry Trading Survey - "Building materials price fluctuations 2025" (2025)
  20. Office for Budget Responsibility - "Planning reforms housing forecast" (2025)
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