£799,000 £1,146,750 -8.3% £642 £42.5bn 16,615
NATURAL RECALIBRATION
Following a strong surge in sales in March 2025 driven by the stamp duty deadline, market activity naturally recalibrated in April. However, the outlook remains positive, supported by a recent interest rate cut and supportive underlying conditions for home buyers.
BALANCING ACT
The UK economy grew by 0.7% in Q1 2025, more strongly than expected and largely driven by the UK services sector¹. GDP is now expected to grow by 1.2% in 2025, up from its previous 1.1% estimate, with further growth of 1.4% projected for 2026, despite global headwinds such as U.S. tariffs². The Bank of England lowered its base rate by 25 basis points in May, bringing it to 4.25%, good news for borrowers. However, since then, inflation has risen to 3.5% in the 12 months to April, up from 2.6% in March, largely due to a spike in household bills¹. As a result, earlier expectations of two rate cuts this year have been scaled back, with markets now pricing in just 0.5 percentage points of cuts over the next 12 months³. However, strong fundamentals are supporting the market, including low unemployment, rising real earnings, and expectations that borrowing costs will ease further in the coming quarters.
TRANSACTION DIP
Property transactions fell sharply by 64% from March to April, following the return of higher Stamp Duty charges on 1st April, the largest month-on-month fall since records began 4 . Despite the slowdown, signs of stabilisation are emerging. 40% of agents reported transaction levels at the end of April were similar to three months prior, while another 40% said they were higher5 . There were 60,463 mortgage approvals in April6 . While this represents a 4.9% decline from March, it is only slightly lower than the same period last year (-2.1%), suggesting that market activity remains resilient. This points to a steady level of demand following the end of the stamp duty holiday and the broader recovery in the market.
MOMENTUM RETURNING
The annual rate of house price growth edged up slightly in May to 3.5%, from 3.4% in April7. Following a brief softening in April, due in part to stamp duty changes at the start of the month, there are tentative signs of momentum returning. Property prices have remained relatively stable in recent months, which is helping to support buyer confidence. With 97% of homes achieving their asking price8 , buyer motivation remains strong.
Across the prime markets of England and Wales, the average price of a property is £1,146,750, down 8.3% compared to the same time last year. Scotland (+4%) and the North West (+0.3%) are both showing positive annual growth.
RURAL RISE
Rural areas have seen an average price growth of 23% over the last five years, outpacing the 18% rise seen in urban locations7 . Rural terraced homes have led the way in price gains, while urban flats have lagged behind. Although the pandemic-driven surge in rural demand has eased, demand remains strong, driven by lifestyle changes such as remote working, a need for more space, and tighter household budgets.
¹ONS, ²IMF, ³Reuters, 4HMRC (seasonally adjusted), 5Dataloft by PriceHubble (poll of subscribers), 6Bank of England, 7Nationwide, 8Zoopla
£551,000
£799,722
+4%
£371
£529,000
£715,299 +0.3%
£373
£581,000
£764,537 -1%
£383
£485,000
£621,865 -0.8%
£333
£736,000
£977,440 -6.6%
£482
£920,000
£1,279,312 -8.4%
£567
£420,000
£547,217 -1.8%
£294
£506,000
£671,055 -2.8%
£350
£528,000
£688,462 -2.4%
£334
£800,000
£1,065,868 -3.8%
£524
£1,500,000
£2,358,585 -17.8%
£1,193
£282,222
£799,000
£1,146,750
£237,281
£742,000
£1,097,083
£227,614 £678,000
£1,033,538
£275,794
£657,000
£902,139
£431,765
£1,000,000
£1,448,564
£292,582 £807,000 £1,158,864