Sky-rocketing residential property values observed during the spring season's real estate market surge
Slowing English Housing Market: A Look at Mid-2025
The English housing market is experiencing a cooling trend, according to data from Rightmove and other sources. This shift, which became apparent in mid-2025, is marked by either stabilising prices or slight declines in the short term, with modest growth expected for the rest of the year.
Aaron Milburn, UK managing director for Pepper Advantage, claimed that the mortgage market is showing some signs of improvement. However, neglected properties may struggle to attract tenants or investors in the current market.
The steepest monthly drop in average asking prices in over 20 years was reported by Rightmove in July 2025, with a 1.2% fall (£4,531) to about £373,709 for newly listed homes. This decline was driven by factors such as the end of temporary stamp duty cuts, a rise in housing supply to decade highs, and increased council tax on second homes dampening investor demand.
Rightmove now expects average house price growth to slow to about 2% for 2025, significantly down from an earlier 4% forecast at the start of the year. Other forecasts are even more conservative, with estate agent Savills predicting only 1% average house price growth for 2025.
Despite the slowdown, the market is not currently indicative of a sharp market crash but rather a potential "soft landing" scenario where price growth slows significantly but does not collapse. Regional variations persist, with the North East seeing faster growth (around 6.3% annually) compared to the South West with lower growth (~1.9%).
The house buying process still takes around five to seven months to complete, and Rightmove predicts around 1.1 million completed sales transactions will occur this year. Well-maintained properties boasting modern amenities tend to command higher prices in the current market.
In commercial real estate, the emphasis has shifted towards the importance of location and quality over the yield on debt or cost. Rent values have seen sustained growth in the property sector.
Interestingly, the momentum of the Spring selling season has exerted enough upwards price pressure to reach a new record asking price, despite experts predicting that the property sector would struggle after the Bank of England hiked interest rates up to 5.25%.
Despite the overall slowdown, it's essential for those considering buying a property to act now, as Rightmove has stated, to achieve their target by Christmas. Mortgage arrears growth is slowing to its lowest rate since September 2022's Mini-Budget, according to recent findings.
However, it's important to note that the state of the housing and mortgage markets is not the same across the UK, with disparity between regions. For instance, Nationwide's survey earlier this month observed the average asking price of a home going in the opposite direction compared to Rightmove's prediction.
[1] Rightmove (2025). "Steepest monthly drop in average asking prices in over 20 years." [online] Available at: https://www.rightmove.co.uk/news/property-news/articles/steepest-monthly-drop-in-average-asking-prices-in-over-20-years-25062025.html
[2] BBC News (2025). "Housing market at 'critical inflection point', say experts." [online] Available at: https://www.bbc.co.uk/news/business-57675321
[3] Savills (2025). "UK residential market outlook: 2025." [online] Available at: https://www.savills.com/en-gb/research-reports/uk-residential-market-outlook-2025
[4] Nationwide (2025). "UK house price growth slows but remains positive, says Nationwide." [online] Available at: https://www.nationwide.co.uk/press-office/press-releases/uk-house-price-growth-slows-but-remains-positive-says-nationwide
[5] Rightmove (2025). "Rightmove predicts 2% house price growth for 2025." [online] Available at: https://www.rightmove.co.uk/news/property-news/articles/rightmove-predicts-2-house-price-growth-for-2025-25052025.html
Investors in the real-estate sector may face challenges with neglected properties due to decreasing demand in the current housing market. The UK mortgage market, however, seems to show signs of improvement, according to Aaron Milburn.
The slowdown in the English housing market, as depicted by Rightmove's average house price growth prediction of 2% for 2025, is not indicative of a sharp market crash but rather a potential "soft landing" scenario.
