Despite evidence of a vibrant market, Zoopla indicates a drastic cut in their prediction for 2025 house price increase as buyers account for increased stamp duty costs in their offers in England and Northern Ireland.
The record number of properties for sale helps regulate price increases, with the average UK house price in June standing at £268,400 – an improvement of £3,350 (1.3%) compared to the previous year.
Richard Donnell, the executive director of the research and insight team at Zoopla, characterized the real estate market as being “broadly in balance” with the availability of new properties matching the demand of home seekers.
“We are observing healthy levels of demand and sales, but this is not instigating faster price inflation. More homes for sale, particularly in southern England, are reinforcing a buyer’s market, keeping price rises in control,” stated Donnell.
Although market activity usually slows down during summer, this year has defied trends. The number of buyers in July increased by 11% compared to the same month in 2024, which led to an 8% rise in agreed sales.
Earlier in the year, real estate experts noted a dampening effect on house price growth after the end of the stamp duty holiday in England and Northern Ireland in March. However, recent government-backed changes in the way lenders evaluate mortgage affordability have sparked increased activity, according to Zoopla. Homebuyers can now borrow up to 20% more than they could just three months ago.
“With mortgage rates ‘remaining steady,’ less stringent affordability testing has boosted purchasing power,” Donnell mentioned.
Initially, Zoopla forecasted a 2% rise in house prices for 2025, but they have reduced this to 1%. The annual rate of price inflation slowed to 1.3% in June, the report noted, despite obvious regional disparities.
Prices in Scotland, Wales, and northern England are growing faster – typically by 2-3% annually – while rises are slower in the south. Prices rose by 0.2% in the south-east and London, and 0.3% in the south-west.
The slow growth in London is pulled down by declines in some areas, including a 1.5% drop in west London. Declines were also registered in Truro (down 1.3%), Torquay (down 1.2%), and Exeter (down 1.1%).
“The greater supply of homes for sale and mortgage rates remaining higher than expected are the main reasons for weaker growth,” Donnell noted.
New figures from Rightmove show average asking rents across Britain, excluding London, rose by 1.2% to a new record of £1,365 per month in the second quarter of 2025. The average advertised rate in the capital also hit a new high of £2,712, up 0.5% over the quarter.
The property website’s report says that the average monthly rent paid by new tenants was £417 more than in 2020. This represents a 44% increase, outpacing a 36% rise in average earnings over the same period.
However, most of this growth happened during the peak of the Covid pandemic. Since 2023, year-on-year rent increases have gradually slowed as supply and demand returned to balance. The number of available properties is now 15% higher than a year ago, yet still 29% below 2019’s levels.
The less competitive market means landlords are taking longer to find tenants, in some cases leading to rent reductions. Nearly a quarter (24%) of asking rents were cut during marketing, the highest number since 2017.
“Despite rising asking rents, the key point is that yearly rent increases continue to slow,” said Rightmove’s property expert Colleen Babcock. “Supply and demand is slowly rebalancing towards more normal levels, but we still have a long way to go before we reach pre-2020 levels,” she added.
