May 2025 Property Market Bullet points
- Sources show, the number of sales agreed in the UK is at the highest level for 4 years in May 2025
- Supply (+13%) and sales (+6%) are both up on last year as the market rebounds after initial reaction to the end of stamp duty relief
- UK house price inflation remains stable at 1.6%
- Agents should re-engage with buyers to help them understand the potential boost to their affordability from relaxations to mortgage testing in recent weeks
- Sellers in the North of England and Scotland are recording the highest growth in sale volumes
- In the South of England, stock levels are high and sale volumes lower, so strategy and realistic pricing are key
- The average UK seller is achieving 97% of asking price – a good figure for both sellers and buyers to bear in mind to keep expectations realistic
- The market is on track for 5% more sales and close to 2% price inflation over 2025
Property Market Conditions, May 2025, Summary
Here, Lawson Estate Agents, Managing Director, Darren Lawson, shares his stance and opinions on the current housing market and his outlook for the remainder of 2025.
The stock of homes for sale continues to build, giving plenty of choice: there are now, on average, 35 sellers per estate agent. Of course, a great many of these sellers, when sold, are also buyers, thus supply and demand remain fairly balanced.
Affordability testing for mortgages has been relaxed in recent weeks, meaning buyers could now afford to borrow 20% more than a few weeks ago – at the same mortgage rate. Mortgage rates aren’t going to tumble, but we always recommend buyers speak to an independent mortgage broker to understand what they can afford.
In the South of England, stock of homes for sale is up 15-20% and the growth in sales is smaller. Consequently, it’s trickier to achieve asking price and we’re finding that sellers may need to consider offers given the lower level of competition that buyers are exposed to.
The average UK seller is achieving 97% of the asking price – a good figure for both sellers and buyers to bear in mind to keep expectations realistic.
Answering that age-old question: is now the right time to sell?
Darren considers that it’s not about it being a ‘good’ or ‘bad’ time to sell, but rather his clients’ motivations for moving. There are clearly buyers in the market right now and sales are being agreed for realistically priced homes. If it’s the right time for you to move, a strategy tailored to your local market should mean a successful sale.
Mortgage rates may drift a little lower, but the relaxed lending rules I’ve mentioned are already in place. Buyers using mortgages can now borrow more than earlier in the year, supporting demand as we move into the second half of 2025.
The average house price in the UK is £268,250 as of April 2025. This is a rise of 1.6%, akin to an average rise of £4,330 over the past year.
Rebound in sales after initial reaction to end of stamp duty relief
Darren reports, the number of property sales is on the rise with home buyers returning to the market after the end of stamp duty relief and the Easter holidays.
Latest data shows that the number of sales agreed per estate agent at this time of year is running at the fastest rate for 4 years, since the pandemic boom of 2021. This is due to a higher number of homes for sale and more affordable mortgage rates and availability thereof.
Data sources suggest that there are 13% more homes for sale than a year ago. The average estate agent office has 35 unsold homes. Most of these home sellers are also buyers, which means plenty of interest for realistically priced homes. More mortgage products with sub 4% rates, together with changes to how mortgage affordability is calculated, are encouraging buyers to make offers, supporting a 6% growth in the numbers of sales agreed.
The average UK house price is 1.6% higher than a year ago at £268,250, which is an increase of £4,330 since May 2024. Data shows the average home sale is currently being agreed at 3% (or £16,000) below the average asking price, a level that has been stable over recent months.
6% more agreed sales in May 2025 than a year ago
The shift to higher mortgage rates over the last 3 years has impacted growth rates for housing sales and mortgage applications. Sales declined sharply in 2022/23 as mortgage rates reached 6%.
The growth in sales rebounded over 2024 as mortgage rates fell, which also boosted demand for mortgages. However, the growth in sales and mortgage approvals has slowed in recent months to more sustainable levels.
Sales have now started to increase once again as confidence improves and those using a mortgage are able to borrow up to 20% more due to changes in affordability testing.
Most affordable areas record fastest sales growth
Housing market activity and house price inflation are currently strongest in areas where homes are more affordable. In broad terms, this covers most areas outside the southeastern regions of England.
Data shows northern regions of England; Scotland and the East Midlands are registering the fastest growth in agreed sales compared to a year ago. However, affordability constraints are behind a slower growth in sales across southern regions of England, in particular, in Southeast England, with a decline in sales in the West Midlands compared to a year ago.
The number of homes for sale has an important influence on market activity and house prices. More homes for sale boosts buyer choice and keeps price growth in check. Faster growth in sales erodes the number of homes for sale, limiting what is available and supporting faster house price growth.
More homes for sale across southern England
The number of homes for sale has grown most quickly across southern regions of England, boosting choice. There are 21% more homes for sale in the Southwest compared to a year ago, with 17% more in London and 15% more in the Southeast.
Slower growth in sales and more homes for sale explains why house price growth is less than 1% across all regions of southern England – ranging from 0.5% in the Southeast to 0.9% in the Southwest.
Fewer homes for sale in the North supports price inflation
In contrast, there are just 3% more homes for sale in the Northwest and 5% more in Scotland than a year ago. Lower availability of homes for sale, better affordability and faster growth in sales explain why house prices are 3% higher across the Northwest and 2.9% higher in Scotland, with above-average price rises across northern England and Northern Ireland.
House prices rising by up to 6% in some UK cities
Having explored house price inflation at regional level, Darren notes that it’s worth observing that house price inflation varies widely at a city level – from small price falls in Aberdeen, Brighton and Bournemouth to prices increasing by over 5% in Blackburn and Belfast. The fastest-growing markets tend to be outside southern England.
Cities across the Northwest are registering the highest rates of price growth, as rising employment growth boosts demand and prices. Higher home values and rents in large cities like Manchester are pushing demand into adjacent and accessible areas, boosting house prices.
Price increases remain subdued in southern cities of England, where affordability remains a constraint on how much prices can rise. Aberdeen is under-performing the Scottish market because of weaker economic conditions due to low investment in the oil and gas industry.
Darren expects this variation in price inflation to continue over the rest of the year as home values rise in more affordable areas.
Outlook for the housing market in 2025: modest price gains and more sales
Darren anticipates that stronger competition in the mortgage market and less stringent affordability testing is set to support buyer demand and sales volumes over the second half of 2025.
The different trends in supply and demand across the country have important implications for how sellers approach the pricing of their homes if they are serious about selling in 2025. A realistic stance is a requirement of sellers in southern counties, whereas sellers in northern counties are able to be a little more bullish, says Darren. Buyers also need to adapt to local market conditions in how they pitch offers to buy.
Darren concludes that; overall, the housing market is well set for 5% more sales in 2025 compared to 2024, with just enough house price inflation to keep sellers and buyers entering the market and making bids for homes.
