House prices grow slowly as buyer choice grows

The UK’s housing market is experiencing a slowdown in price growth, with annual increases dropping to 1.4%, according to Zoopla’s latest house price index.

This marks a decline from 2% earlier this year, driven by a 14% rise in the number of homes available for sale, which has expanded options for buyers.

The average UK home now costs £268,400, up £3,960 from last year, but price growth is stalling, particularly in higher-value markets.

Tax and policy changes targeting second homeowners and landlords are also contributing to weaker demand in some areas, further softening prices.

Desire to move

Executive director at Zoopla, Richard Donnell, said: “The number of buyers and sellers agreeing home sales continues to increase year-on-year, demonstrating a continued desire of more households to move home in 2025.

“Improving mortgage affordability will support buying power in the second half of the year.”

He added: “However, buyers remain price-sensitive, especially in higher-value markets where the number of homes for sale has grown the most in the last year, boosting choice for home buyers.

“Serious sellers need to be realistic on where they set their asking price in order to achieve a sale and secure a home move in 2025.”

Mr Donnell says that property sales will rise by 5% this year while prices will grow by 1-2%.

It’s a buyers’ market

The increase in available properties has created a buyer’s market, particularly in London, the South East and South West of England, where the number of homes listed is 16-19% higher than a year ago.

These regions are seeing minimal price growth, with increases below 0.5%, and some areas, such as West Central London (-4.3%), West London (-1.3%), Torquay (-1.7%) and Truro (-1.3%), are witnessing price declines.

In contrast, more affordable markets with average prices below £200,000 are experiencing stronger growth at 2.7%, with hotspots like Wigan (4.3%), Falkirk (3.8%) and Blackburn (3.6%) seeing rises above 3.5%.

In areas where homes average more than £500,000, prices have dipped slightly by 0.2%, affecting 8% of properties, mainly in inner London and southern England.

Meanwhile, markets priced between £200,000 and £250,000, which account for half of UK homes, are seeing 1.9% growth.

Busy sales market

Zoopla says that sales activity is robust, running at its fastest pace in four years, with a 6% increase in agreed sales compared to last year.

The average estate agent now has 37 properties listed, up from 32 a year ago.

However, sellers are being warned to set realistic asking prices to secure timely sales.

The average time to sell a home is 45 days, though this varies regionally — it’s 35 days in the North East compared to 57 days in Wales.

More than one in five homes (22%) has been on the market for more than six months without selling, and 23% have lingered for three to six months, with unsold homes averaging 75 days on the market.

Property sector reaction

Nathan Emerson, Propertymark‘s chief executive, said: “It’s encouraging to see further house price growth, as people continue to approach the buying and selling process with improved certainty.

“Although we are still seeing elevated base rates currently sitting at 4.25%, we are starting to see some high street lenders offering sub-4% mortgage deals.”

Tom Bill, the head of UK residential research at Knight Frank, said: “The current supply glut has put downwards pressure on asking prices, which sellers must take into account if they need to transact sooner rather than later.

“Geopolitical and tariff risks appear to be fading, which points to a smoother ride for the housing market in the second half of the year, which should be boosted by at least two rate cuts.

“However, the government’s non-existent financial headroom means tax rise speculation is likely to intensify ahead of the autumn Budget in a re-run of last year.”