We're set for a buyer's market throughout the summer
- The buyer's market is officially here throughout the summer.
- Borrowing costs unchanged, as the base rate held at 4.25%, and I predict a cut to 4% in August.
- Average house prices have increased by 74% over 20 years.
- 22% of homes listed for sale have been on the market for over six months.
- Approvals up, with the highest number of remortgages in a single month since October 2022.
- House prices to increase by just 1% in 2025.
- However, house prices are expected to increase by 24.5% over the next 5 years, according to Savills.
- FCA softens remortgage rules.
Zoopla confirms what we already reported last month - we are in a buyer's market as there are now a record number of homes for sale, which is pushing down the average house price rises. In fact, Rightmove have reported the steepest monthly drop in UK house asking prices in over two decades, with July seeing a 1.2% fall to £373,709. Even though asking prices are falling, market activity is strong, with sales agreed up 5% and buyer enquiries rising 6% year-on-year
The housing market in July normally slows down due to the summer holidays and schools breaking up, but this isn't happening this year. Buyer numbers in July are 11% higher than in the same month of 2024, resulting in an 8% increase in sales being agreed. The cause of this is a perfect "buyer's market" storm, whereby the mortgage rates have remained low, the Bank of England are giving positive messages for further base rate cuts, mortgage affordability checks are relaxed, more sellers are coming to market and being prepared to take less than their asking prices.
We’re seeing healthy levels of demand and sales, but this isn’t sparking faster price inflation. In fact, more homes for sale, particularly across southern England, is re-enforcing a buyer’s market, keeping price rises in check.
Source: Richard Donnell, Executive Director of the research and insight team at Zoopla
House Prices Predicted to Only Increase by 1% in 2025
According to estate agent Savills, UK house prices are set to rise by just one per cent on average in 2025. It had previously expected a four per cent rise on average this year but revised its forecast due to a “weaker first half” than anticipated. The low increase was linked to the geopolitical uncertainty and stamp duty changes; however, it is also likely that the increase in the volume of sellers will have equally played a part.
On a more upbeat note for homeowners, Savills upgraded its forecast for house price growth over the next five years from 23.4 per cent to 24.5 per cent. This would see the average cost of a house rise by £86,300 by 2029.
Why are there more properties for sale?
There are a few reasons why sellers are returning to the market in 2025:
- Landlords Exits. The returns for the independent landlords have been reducing with increased taxes, regulatory obligations, and potential changes to EPC requirements. For some independent landlords, now is a good time to sell and cash in with Capital Gains Tax at 24% - the lowest tax rate since June 2010.
- Mortgage Unaffordable. With the base rate being 0.10% for 5 years, some homeowners need to sell as they cannot afford remortgaging at current mortgage rates.
- Fixed for Longer. I think homeowners fixed their mortgage for 5 years or more during the low interest years and are now only coming to market to upsize or downsize.
What makes this a perfect "buyer's" storm is that they have more affordable mortgages, and more negotiating power as there are more properties to choose from. I expect to see asking prices adjust to account for this and offer more realistic prices to buyers.
Lifetime ISA underfire
A Treasury Select Committee has stated that Lifetime ISAs (LISA) could lead first-time buyers to make poor investment decisions. The issue revolves around the penalty applied when removing money from your ISA for anything other than your first purchase, pension, or if you're terminally ill with less than 12 months to live.
You can save up to £4,000 each year, until you’re 50, and the Government will add a 25% bonus to your savings, up to a maximum of £1,000 per year. The goal is to help first-time buyers save up for their first home. The problem with the scheme is that if you need to call upon any of the money in the LISA, you’ll pay a withdrawal charge of 25%.
The Committee raised concerns over a surge in withdrawal charges and described the rules penalising benefit claimants as “nonsensical”. It also warned that the “complex” product may not suit everyone. Read more about the LISA: Lifetime ISA.
Will mortgage rates go down in August 2025?
In their June meeting, the MPC voted 6-3 to keep the base rate at 4.25%, and its next scheduled meeting is August 7, 2025. Most analysts expect at least two more base rate cuts in 2025, with the first likely to occur in August and the second towards the end of the year, potentially bringing the base rate down to 3.75%.
Mortgage lenders started to cut their rates by 0.1% or 0.2% in July, which indicates a high chance of another cut in the August MPC meeting. Governor Andrew Bailey stated in a recent interview: "I really do believe the path is downward" when talking about interest rates.
I predict the MPC will cut the base rate to 4%, the 5th since August last year. The flexibility to react in the close September meeting will give confidence to make this change.
Source: Andrew Boast, CEO of SAM Conveyancing
The upcoming MPC announcements on Bank Rates are on the 7th August, 18th September, 6th November, and 18th December.
Sales volumes rebound as the average property price continues to rise
England & Wales
In May 2025, the average property price in England & Wales stood at £285,026; a 3.5% year-on-year increase compared to May 2024 (£275,392).
The average price for first-time buyers reached £238,803, reflecting a 3.3% annual increase and continued strong entry-level demand. Meanwhile, owner-occupiers purchased at an average of £346,715 (up 3.7% year-on-year), and cash buyers at £270,927 (up 2.6% year-on-year), often leveraging strong negotiating power in a market where sellers highly value speed and certainty.
New build properties, at an average of £460,612 in March 2025, not only continue to command a premium but also mark a significant 31.4% increase from March 2024 and represent the highest ever recorded average price for new builds.
Sales volumes show a healthy rebound on the transactional front. In March 2025, England & Wales recorded 74,336 completed transactions. This represents a 30.3% increase from the 57,034 sales observed in March 2024, and is the highest sales volume since November 2022.
Mortgage approval reports
Home buyers
In June 2025, House Purchase Mortgage Approvals continued their upward trend, reaching 64,167; a 1.4% increase from the 63,288 approvals recorded in May 2025 and a 5.6% increase from the 60,761 approvals in June 2024.
This follows a stronger activity in late 2024, which peaked around October 2024 at 68,296 approvals, and signals renewed buyer momentum as we move further into Q2 and Q3 2025. The market appears to be shaking off the lull seen in early Q2.
Additionally, while affordability constraints, the Bank of England maintaining the base rate at 4.25% (as of June 2025), and broader economic uncertainties, including world conflicts, are factors, the rising approval numbers suggest increasing buyer confidence and adaptation to the environment.
Remortgages
Remortgage Approvals reached 41,807 in June 2025. This represents a slight 0.5% increase from 41,607 in May 2025, and a substantial 53.2% increase from 27,274 in June 2024.
The May and June 2025 numbers are notably the highest remortgage approvals in two years; a strong drive by homeowners to secure new deals amidst their existing fixed-rate mortgages expiring or to avoid reverting to potentially higher Standard Variable Rates (SVRs).
FCA softens remortgage rules
Financial Conduct Authority (FCA) published the Policy Statement 25/11: Mortgage Rule Review First steps to simplify our rules and increase flexibility. In this review, they have, therefore, removed guidance no longer required, and amended our rules to provide greater opportunity for innovation and to make it easier to:
- Remortgage with a new lender.
- Reduce the overall cost of borrowing through term reductions.
- Discuss options with a firm, while still having the option to seek advice if needed.
The review forms part of the 5-year plan from the FCA to support growth in the housing market by simplifying their mortgage rules. In March this year, mortgage lenders were reminded of these changes, which has seen lenders provide access to mortgages to more people.
The FCA’s reforms are a welcome step to help lenders respond more effectively to customer needs and widen access to homeownership. Their optional nature means that firms can apply them in line with their own risk appetites. By reducing regulatory friction and enhancing switching flexibility, the reforms will enable the mortgage sector to continue to support the government’s growth agenda, by supporting both new and existing mortgage customers.
Source: Charles Roe, Director of Mortgages at UK Finance
How many new-build properties are being built?
In Q1 2025, total starts for new homes reached 29,610. This marks a notable increase of 15.5% compared to Q4 2024 (25,640) and a substantial 22.8% rise year-on-year from Q1 2024 (24,110), suggesting renewed confidence among housebuilders, rebounding from lows experienced in late 2023.
Conversely, total completions in Q1 2025 registered 32,560 units. This represents a 20.3% decrease from Q4 2024 (40,860) and a 5.2% decline year-on-year from Q1 2024 (34,360). This adjustment in completions reflects the inherent time lag from earlier periods of lower starts, as well as ongoing challenges in delivery.
Labour is expected to fall short of its 1.5 million homes target, with projections estimating 840,000 homes will be delivered over five years
Source: Savills
Andrew Boast FMAAT
CEO of SAM Conveyancing
Well, you heard it here last month before Zoopla confirmed it; we're in a Buyer's Market, and this perfect "buyer's" storm will go on strong throughout the summer.
I predict the MPC will cut the base rate to 4%, the 5th since August last year. The flexibility to react in the close September meeting will give confidence to make this change.
Add to this the recent Mortgage Rule Review, and more homeowners can remortgage and secure a new mortgage more easily and avoid paying high variable interest rates.
Sources: Latest data from - Gov.UK, Bank of England, UK House Price Index, ONS and Propertymark (NAEA).
Without Killing Anyone
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