Annual home worth progress within the UK has halved, with costs rising by simply 3.5% within the yr to April, in line with the Workplace for Nationwide Statistics (ONS).
This adopted a 7% rise in home costs within the 12 months to March 2025.
The typical dwelling now prices £265,000.
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That is the primary slowing of UK annual home worth inflation since December 2023. The ONS mentioned IT was attributable to a worth fall between March 2025 and April 2025, which coincided with stamp obligation adjustments.
The ONS data is essentially the most complete of the home worth indices as IT contains all money and mortgaged transactions. Nevertheless, IT has a time lag of as much as two months, as IT takes some time to course of conveyancers’ submissions to the Land Registry after a sale is accomplished.
When it comes to Might home costs, Halifax has reported that property costs fell by 0.4%, which means annual progress has dropped additional to 2.5% (down from the lender’s 3.2% studying in April). In distinction, Nationwide mentioned property costs edged up barely, with a 3.5% rise within the yr to Might, up from 3.4% a month earlier.
Tom Invoice, head of UK residential analysis at Knight Frank, feedback: “The UK housing market continues to be in restoration mode after the stamp obligation cliff edge in April however costs are being saved firmly in verify by an overhang of provide.”
Sarah Coles, head of non-public Finance at Hargreaves Lansdown, factors out that the slowing of annual worth rises is notable, as a result of the tempo – as recorded by the ONS – had been rising because the finish of 2023.
She provides: “Nevertheless, IT won’t be something to maintain sellers up at evening, as a result of IT was all the time anticipated within the aftermath of the stamp obligation vacation. The sheer value of property additionally saved a lid on worth rises throughout the vacation, so this wasn’t a steep climb and a dramatic descent. IT was extra of a delicate incline adopted by a saunter downhill.”
What’s the outlook for the property marketplace for the remainder of this yr?
The trajectory of home costs for the remainder of this yr will rely upon a number of components, similar to mortgage charges, the state of the financial system and whether or not property patrons are nervous about potential tax rises sooner or later.
The Financial institution of England will announce its subsequent rate of interest choice tomorrow (19 June) however the consensus is that charges are anticipated to stay at 4.25%.
Whereas Invoice at Knight Frank doesn’t anticipate a price reduce earlier than August, he says the “weak state of the UK financial system is placing downwards strain on mortgage charges, which ought to assist demand within the brief time period”.
In response to Mark Harris, chief government of the mortgage dealer SPF Non-public Shoppers, the mortgage market seems buoyant.
“Lenders have loads of liquidity and are displaying that they’re eager to lend. Mortgage charges are regular on the entire, with some lenders persevering with to cut back charges and ease standards, serving to debtors tackle greater mortgages than they could have been in a position to simply a short time in the past.
“There are additionally indicators of innovation with regard to serving to first-time patrons specifically, which is nice for the general Health of the housing market as IT permits these additional up the ladder to make their strikes.”
So, comparatively low mortgage charges – particularly in comparison with latest years – ought to assist assist home costs within the months to return.
Nevertheless, some patrons could also be ready for charges to drop additional.
Darrell Walker, group gross sales director at Chetwood Financial institution for ModaMortgages and CHL Mortgages for Intermediaries, notes: “With the Financial institution of England anticipated to carry the bottom price at 4.25% tomorrow, taking a conservative strategy amidst persistent inflation and world uncertainty, there are more likely to be some potential patrons who’re sitting tight and ready for charges to return down earlier than coming into the market.”
Invoice highlights one other potential headwind for the property market: “As exercise gathers momentum, what patrons and sellers might do with out this summer time is a re-run of final yr and a recreation of ‘guess the tax rise’ forward of the autumn Price range.”
Amy Reynolds, head of gross sales at Richmond property company Antony Roberts, is optimistic in regards to the subsequent few months, saying that “a modest uptick in property costs is to be anticipated on condition that the spring/summer time market is historically a time when individuals transfer and the market is at its busiest”.
She provides: “There’s nonetheless loads of cash and need to purchase within the core worth ranges. Surprisingly, we’re seeing an increase in first-time purchaser exercise though the stamp obligation vacation has ended.
“Many are receiving assist from household and are seemingly being pushed by the pressures within the rental market, the place demand far exceeds provide and rental listings have dropped sharply as landlords exit the sector.”
