The Residential Property Market Outlook for the Remainder of 2025

Housing market for the reminder of 2025

As we move further into 2025, the residential property market in England remains a focal point for homeowners, investors, and industry professionals. With economic fluctuations, government policy changes, and shifting buyer priorities shaping the landscape, speculation about what lies ahead is both necessary and challenging. Below, we explore the potential trends that could define the housing market for the remainder of the year.

Market Stability or Continued Volatility?

The early months of 2025 have seen a mixed performance in the property market. Interest rate decisions by the Bank of England have played a crucial role in determining affordability for buyers, with recent adjustments leading to fluctuating mortgage rates. While inflation has begun to ease, its impact on the cost of living and borrowing continues to influence buyer confidence.

If economic stability improves in the second half of 2025, we may see a more balanced market with steady house price growth. However, any unexpected economic downturns, geopolitical tensions, or policy shifts could lead to further unpredictability, keeping the market on edge.

House Prices: Up, Down, or Plateau?

The question on every buyer and seller’s mind is whether house prices will rise, fall, or stagnate. In 2024, we witnessed a cooling in house price growth due to affordability constraints, higher mortgage rates, and cautious consumer sentiment. Moving into the latter half of 2025, several key factors will determine price movements:

• Interest Rates: If mortgage rates remain stable or decline, we could see a modest resurgence in demand, supporting price stability or slight growth.

• Housing Supply: A continued shortage of available homes, particularly in sought-after locations, may prevent significant price drops.

• Government Policies: Any changes to stamp duty, housing incentives, or planning laws could influence buyer behavior and market trends.

While a major crash is unlikely, we may see a continuation of slow price adjustments, with regional variations playing a significant role in market performance.

Regional Differences in Market Performance

Different parts of England may experience distinct market conditions. London and the Southeast, which have seen inflated house prices over the years, might witness slower growth due to affordability constraints. On the other hand, Northern cities such as Manchester, Leeds, and Birmingham may continue to attract buyers and investors looking for value outside the capital.

Coastal and rural areas, which gained popularity during the remote-working boom, may see a leveling-off in demand as workplace policies evolve. However, locations offering good infrastructure, lifestyle benefits, and affordability are likely to remain resilient.

First-Time Buyers and Mortgage Trends

First-time buyers have faced significant challenges in recent years due to high deposit requirements and stringent lending criteria. In the second half of 2025, lenders may introduce more flexible mortgage products to attract younger buyers, particularly if inflationary pressures continue to ease. Shared ownership schemes, longer mortgage terms, and government-backed initiatives may also play a role in increasing accessibility for this demographic.

The Role of Technology in Property Transactions

The property sector continues to embrace technology, with digital conveyancing, AI-powered property valuations, and virtual property viewings becoming more prevalent. These advancements are streamlining transactions, reducing paperwork delays, and improving overall efficiency in the buying and selling process. Firms that leverage technology effectively will likely gain a competitive edge in an evolving market.

Buy-to-Let and Investment Market Outlook

The buy-to-let market has been under pressure due to tax changes, stricter regulations, and increased mortgage costs. While some landlords have exited the sector, others are adapting by focusing on high-yield locations and energy-efficient properties to meet evolving tenant demands. Rental prices remain strong, particularly in urban centers where demand continues to outstrip supply.

For investors, the remainder of 2025 will require strategic planning, with a focus on long-term rental demand, regional growth potential, and regulatory compliance.

Conclusion: A Market in Transition

The residential property market in England is likely to remain in transition throughout the rest of 2025. While economic improvements and stable interest rates could bring renewed confidence, challenges such as affordability constraints and supply shortages may persist. Regional variations will continue to play a key role in shaping market performance, and technology-driven efficiencies will define the next phase of property transactions.

Whether you are a buyer, seller, investor, or industry professional, staying informed about economic and policy changes will be crucial in navigating the evolving housing market landscape.