The UK property market is currently performing in line with long-term expectations, buoyed by a stable economic environment, albeit one which is harsher than expected in the longer term.
Despite some claims that the market is slowing, up-to-date data tells a more optimistic story.
Sales activity remains robust despite elevated interest rates and inflation; rent inflation is now structurally higher, reflecting supply-demand imbalances; and market fundamentals are sound, contradicting headlines suggesting a slowdown.
Key trends
– Transaction Volumes: Annual sales are on track to reach the typical figure of 1.2 million transactions.
– Property Prices: House prices are rising modestly in most areas – generally around 3% per year.
– Bank Base Rate (BBR): Interest rates are higher than hoped for currently, but the base rate is holding steady at 4% compared to the expected 3–3.5%.
– Inflation: General inflation remains elevated at 3.8%, above the long-term average of 2%. When this falls, BBRs can fall further, applying a further boost to the property market.
According to TwentyCi and Chris Watkin, by the end of the first week of October 2025, property listings were at their highest level for nine years, sales agreed were at the third highest level and completions were at the second highest in the same period.
The exception to this is the likes of the London market, especially the Prime Market, it is suffering, but it has been since around 2014.
According to Chris Watkin: “We are in fact in a balanced, not a broken property market and despite what the doom mongers and headlines suggest, it is not crashing either.”
A steady but temporary slower pace
Recent property indices are painting a consistent picture: the market has slowed slightly. However, many of these reports are comparing activity to September and October 2024, when the BBR began to drop from its peak of 5.25%. By the end of 2024, the BBR had eased to 4.75%, which provided a welcome lift to the property market at the time.
In contrast this year, the BBR has remained the same at 4% since the summer and we need to watch the Monetary Policy Committee (MPC) meeting on 6th November to see if it holds the BBR at this level as expected.
A rate cut before year-end could give both the property market and wider economy a boost. However, the upcoming budget at the end of November could also include measures that offset any positive effects from a lower interest rate.
Despite a possible seasonal slowdown as we approach Christmas, the outlook for 2025 remains positive. If inflation and the BBR continue to fall into 2026, the property market will have shown remarkable resilience, weathering several years of economic headwinds.
Property price and market indices headlines
Annual price fall driven by south, which could be harder hit by rumoured property taxes.
“The average price of property coming to the market for sale rises by 0.4% (+£1,517) this month to £370,257. However, average new seller asking prices are now 0.1% below this time last year following several months of muted price growth.”
Subdued momentum still evident across the sales market
“House prices still seen creeping lower at the aggregate level.”
Inflation Outpaces Both Home Price and Rental Growth
“Asking prices edged down in all English regions (except the North East, North West and Yorkshire), Scotland and Wales during August, making the national average drop by 0.3%.”
Annual house price growth steady in September
“Annual rate of house price growth of 2.2% in September, similar to 2.1% seen in August.”
House prices edge down in September
“House prices decreased by -0.3% in September vs a rise of +0.2% in August.”
Slowing housing market reflects falling confidence
“Prices are in retreat in a number of areas and not least Southern England.”
House price growth has eased through 2025 and now sits at 1.3%, which is roughly the same as this time last year
“Budget uncertainty is prompting buyers to ‘wait and see’, leading to the first annual decline in sales agreed in two years.”
Summary of the best insights from the indices
– The average price of property coming to the market for sale rises by 0.3% (+£1,165) this month to £371,422. This is below the ten-year average October bounce of +1.1%, as the decade-high level of property for sale limits seller pricing power.
– The month of September saw a softening of activity year-on-year compared with a strong September 2024, which was boosted by the first Bank Rate cut for four years. In addition, some movers started to take action to avoid April 2025’s stamp duty increase. However, the 2025 market remains resilient, though somewhat cautious, when looking at the year to date.
– The number of new buyers contacting estate agents about homes for sale, and the number of new sellers coming to market in the full month of September were both down by 5% compared to a year ago. However, looking at 2025 year to date, new buyer demand is up by 2% compared to the same period in 2024, while the number of new sellers coming to market is up by 5%. The number of sales being agreed in the year to date is also up by 5% compared to the same period in 2024.
– The annual price dip continues, with falls in London and the south of England dragging down the overall national average to -0.1%. However, Scotland, Wales and the rest of England have all seen annual asking price rises of at least 1%: Southern England is being particularly affected by a combination of increased stamp duty, high buyer choice, reduced appeal to some international buyers, and some ongoing jitters about the forthcoming Budget.
– Annualised home price growth across England and Wales continues to be well below the level of inflation at just 0.8% overall. We estimate that real growth currently stands at -4.7%.
– Sales market momentum remains elevated although this heightened throughput is not enough to significantly reduce the unsold stock total. Typical Time on Market is currently three days higher than in September last year and looks set to rise further.
– Budget uncertainty is prompting buyers to ‘wait and see’, leading to the first annual decline in sales agreed in two years.
– House price inflation is steady at +1.3%, with prices flat in southern England but rising by more than 2% elsewhere.
– More homes for sale (+7%), serious buyers now have more choice than they have seen in recent years.
– 350,000 homes worth £100bn are progressing through the sales pipeline – the largest in four years.