£796,000 £1,139,965 -8.8%
£638 £37.6bn 14,616
Source: Dataloft by PriceHubble, Bank of England, HMRC, ONS
BOUNCE BACK
Whilst the Bank of England held the base rate in June, further reductions are expected later in the year, which should provide a further boost to buyer and seller confidence. Buyer choice is increasing, and transaction levels are recovering, while price sensitivity remains a key factor.
MARKET CONDITIONS
The Bank of England held the base rate steady at 4.25% in June, citing persistent inflation and ongoing geopolitical tensions. However, it signalled that cuts may come potentially as soon as August. The latest consensus forecasts suggest two further cuts this year, bringing the rate to 3.75% by year-end, with a further drop to 3.5% expected by the end of 2026¹. Inflation remains above target, with May’s rate at 3.4%. Global tensions, particularly in energy markets, continue to pose inflationary risks.
Mortgage rates have continued to decline, despite interest rates being held in June. Dozens of mortgage deals are now available below 4%, including from Nationwide, HSBC, Barclays, Santander, and Coventry Building Society. Lower mortgage rates have played a key role in supporting market activity. The average five-year fixed rate is now 4.22%, down from 4.41% in January, while the average two-year fix fell to 4.19% in May, down from 4.65% at the start of the year². This is the lowest level for two-year fixed rates since September 2022, which was the first month the impact of the Liz Truss mini-budget and other emerging inflationary pressures sent rates soaring.
PRICE SENSITIVE
Whilst cost of living and interest rate affordability pressures are easing, buyers remain price-sensitive in their property decisions, particularly in more expensive markets. Buyer choice has also increased, with 14% more homes on the market compared to a year ago³. This greater availability is helping to support higher sales volumes, but it is also a key factor putting downward pressure on house prices. The annual rate of house price growth slowed to 2.1% in June, from 3.5% in May4 . Across the prime markets of England and Wales, the average price of a property is £1,139,965, down -8.8% compared to the same time last year.
UPWARD SHIFT
Transactions bounced back in May, with a 25% month-onmonth increase following the dip in April after the surge in activity at to beat the stamp duty deadline at the end of March. Despite this strong monthly bounce back, levels are still down on last year’s rates (down 12% year-on-year5). Other market indicators are showing positive signs. The number of sales being agreed is running at the fastest pace in four years, currently 6% above last year’s levels³, suggesting that transaction activity will pick up speed.
Mortgage approvals rose sharply, up 20% between April and May, with volumes now just 9% below last year’s figures². With mortgage rates continuing to ease, despite the Bank of England keeping interest rates unchanged at its latest meeting, overall market confidence remains strong. Looking ahead, a net balance of +25% of respondents in the RICS monthly survey believe that sales activity will begin to pick up over the next 12 months, marking the most optimistic reading since February6
CASH BUYERS
The proportion of cash buyers in Great Britain has fallen, with 27% of current property sales funded by cash, down from 33% a year ago7. This follows a short-term rise in cash purchases during 2023 and 2024, when high interest rates discouraged mortgage borrowing. As rates begin to ease and mortgage demand increases, the market is returning to its longer-term average.
¹Dataloft by PriceHubble, Bank of England, HM Treasury, June 2025, ²Bank of England, ³Zoopla, 4Nationwide, 5HMRC, 6RICS, 7Dataloft by PriceHubble, ONS, UK HPI April 2025, England and Wales
£553,000
£800,733 +3.5%
£374
£532,000
£715,004 -0.1%
£373
£583,000
£762,420 -0.9%
£381
£486,000
£625,690 -0.5%
£335
£732,000
£965,702 -7.8%
£476
£918,000
£1,275,824 -8.5%
£566
£420,000
£546,687 -1.9%
£294
£511,000
£677,264 -1.4%
£350
£528,000
£688,034 -2.5%
£334
£800,000
£1,061,629 -4.4%
£523
£1,480,000
£2,315,244 -19.2%
£1,175
Source: Dataloft by PriceHubble, Land Registry.
Source: Dataloft by PriceHubble, Land Registry.
£282,994
£796,000
£1,139,965
£236,984 £735,000
£1,074,480
Source: Dataloft by PriceHubble, Land Registry.
£276,462
£658,000
£898,675
£432,441
£1,000,000
£1,446,182
£228,781 £677,000
£1,025,574
£293,530 £804,000 £1,150,119
Source:
Source: Dataloft by PriceHubble, Land Registry.
Dataloft by PriceHubble, Land Registry.
Source: Dataloft by PriceHubble, Rightmove.