UK House Sales Surge
6% Increase on Last Year
UK house sales have reached their highest levels since the post-lockdown “race for space” in 2021, driven by improved mortgage affordability and increased market activity after two subdued years. According to property site Zoopla, sales agreed in May 2025 are up 6% compared to the same period last year, marking a four-year high. Estate agents report particularly strong activity in northern England and Scotland.
The housing market experienced a temporary dip in April due to Easter holidays and the introduction of higher stamp duty rates. However, May has seen renewed momentum, supported by a 13% year-on-year increase in homes for sale, providing buyers with more options and exerting downward pressure on prices.
UK house prices have grown modestly by 1.6% over the past year, reaching an average of £268,250. Sellers are accepting offers approximately 3% below asking prices, equating to around £16,000 less.
Regional disparities persist, with northern towns like Blackburn and Belfast experiencing over 5% growth, while southern cities such as Bournemouth and Brighton have seen slight declines. The increased supply of homes in the south is limiting price growth in those areas.
Zoopla anticipates a 2% overall price rise and a 5% increase in sales nationally for 2025, reflecting continued market resilience and buyer interest.
Reducing the Base Rate
In the broader economic context, the Bank of England reduced its base interest rate by 0.25 percentage points to 4.25% in May 2025, the lowest in over two years. This move aims to support economic growth and has contributed to improved mortgage affordability.
However, banks and building societies have raised mortgage rates, particularly affecting borrowers with high equity. Over the past week, nine lenders, including Halifax, Nationwide, NatWest, and Santander, have increased fixed-rate mortgage prices, especially targeting those with low loan-to-value ratios.
According to a recent article from the Financial Times, the UK government is considering reforms to ease regulations for small and medium-sized builders to address the housing affordability crisis and boost home construction. Proposed changes include exemptions for smaller developers from certain environmental regulations and the post-Grenfell safety levy.
These developments suggest a housing market in recovery, with increased activity and modest price growth, supported by improved mortgage affordability and government initiatives aimed at boosting housing supply.
