Midway through 2025, the UK housing market is finally showing some signs of life. After quite a subdued 2024, new figures suggest pretty modest price rises, improved mortgage availability, and a slight shift in buyer sentiment.
It isn’t quite a boom, but for those who are watching and waiting, the question is whether now marks the start of a slow but steady rebound. Let’s take a deeper look at what’s changed and what it could mean for you.
Prices Are Up (But Only Just)
Average UK house prices have crept up in the first half of 2025, with regional variations creating a mixed bag. Nationwide, annual growth is between 2% and 3%, with stronger gains in Northern England and Wales, while London and the South East continue to tread water.
This gentle upward trend is welcome news for homeowners and could reflect renewed confidence among buyers, but it’s no cause for partying just quite yet.
Some of the increases could very well be seasonal, tied to the typical spring bounce in activity we tend to see at this time of year. Others have pointed to the rush to complete transactions ahead of the confirmed Stamp Duty changes, which came into effect on 1 April 2025.
Still, the stabilisation alone is a relief after months of uncertainty, suggesting we could be entering a more balanced phase of the property cycle.
Rate Pressure Is Easing
One of the more encouraging shifts so far this year is the change in mortgage pricing. Following the Bank of England’s decision to hold the base rate at 4.25% as of March 2025, several major lenders, including Barclays, HSBC, and Co-op Bank, have announced reductions in their fixed-rate mortgage deals, with some now dipping below the 4% mark.
At the same time, Halifax and Lloyds have relaxed lending criteria, allowing borrowers to access larger loans relative to their income. This is a significant development, particularly for those who were previously constrained by tighter affordability stress tests.
More competitive deals and broader access are already making a difference. According to UK Finance’s Q1 2025 Report, mortgage approvals are forecast to rise by around 13% this year, potentially reaching their highest level since 2021.
Buyer Confidence Rising Slowly
Although confidence hasn’t roared back, there are signs that first-time buyers and home movers are finding their footing again.
Online property searches have picked up pace, estate agents are reporting more viewings, and the number of low-deposit mortgage products (including 95% LTV) has hit its highest point since the 2008 financial crisis. For younger buyers, especially, the reappearance of 95% loan-to-value mortgages unlocks doors that felt firmly shut a year ago.
That said, affordability remains a sticking point for many. Rising living costs and stagnant wages mean that even modest house price growth can push certain buyers out of reach. However, the easing in mortgage rates and increased loan availability are helping to balance the scales.
Government Support in Play
Government schemes are playing a supporting role in this mid-year market shift. The Mortgage Guarantee Scheme, originally introduced in 2021, was extended again in early 2025 and continues to support the availability of 5% deposit mortgages. Shared Ownership and First Homes initiatives are still active in various regions.
While these aren’t perfect, and not accessible to everyone, these schemes are giving some buyers a potential safe route onto the ladder. Political uncertainty may shape how long this support remains in place, but for now, they offer up some valuable help for those struggling with tricky upfront costs.
What Should Buyers Be Thinking About Now?
So, is now the time to act? That all depends on your personal circumstances. But here are a few things to have a bit of a think about:
- If you’ve been waiting for lower rates: Conditions are improving. Fixed deals below 4% are back, and affordability checks are more flexible with some lenders.
- If you’re a first-time buyer: Review the available support schemes in your area and consider speaking to a mortgage adviser about new low-deposit options.
- If you’re trading up: Stable prices and more buyer activity could make this a sweet spot to sell and buy before any further shifts in interest rates or tax rules.
Final Thoughts
The 2025 property market isn’t booming, but it might finally be turning a corner. Price growth is slow but steady, lenders are loosening up, and buyer sentiment is quietly improving.
If you’re thinking about a move, or wondering whether now’s the right time to get on the ladder, speaking to an adviser can help to make sense of it all, (we know it is a lot).
Whether it’s understanding how much you can borrow, exploring mortgage deals, or making sense of government schemes, a conversation with an adviser is a great step.
Call 020 8366 4400 or email enquiries@cedarhfs.co.uk to get started.