This week, housing targets continued to fall short, while buyer affordability issues and prolonged building regulator sign-off is deterring developers from committing in the short term, spoiling the government’s growth plans. Meanwhile, oversupply continues to regulate house price growth, enabling some to move forward and those left behind to benefit from restricted rental growth due to it. Welcome to this week’s UK Property News Recap – 01.08.2025.
Needs-based renters lead rental growth
Annual rental movements continue to be driven by needs-based demand but affordability pressures are curtailing significant growth. Savills found families looking to roost before the autumn term drove growth in the second quarter, up 1.4% in areas such as Barnes and Clapham. Yet smaller and cheaper properties that once had it easy are struggling to achieve what landlords would like with affordability for tenants stretched.
Prime central London rents are divided. Overall rents fell 0.3% annually but for properties priced under £1,000 per week they grew 0.3% over the last 3 months, 1.1% higher than they were a year ago. That said, for properties asking over £4,000 per week, tenants weren’t having it, causing rents to fall by an average of -1.7% over the past year.
Padel planning makes great gains
Padel proves a “smash”, “breaking” previous planning application scores for four consecutive years. In 2021, there were just 53 padel planning applications submitted in the UK, which jumped to 348 in 2024. So far in 2025 there have already been 295 submissions which SearchLandHQ estimated to rise to 544 by the end of the year, marking annual growth of 56%. Shame new housing doesn’t have the same turn of speed!
London continues to miss annual housing targets
Affordability issues deter developers from committing to the capital in the short term, leading to a decrease in new homes. Currently, the capital is expected to deliver less than 5% of its annual target of 88,000. At the same time housing starts fell by more than 90% compared with the financial year ended in 2023. For two-thirds of the capital’s boroughs, there were zero starts in the second quarter on developments with more than 20 private homes, according to researcher Molior London.
There are many reasons that have culminated in London housebuilding reverting to rubble stats-wise but fundamentally, if buyers can’t afford to buy at a price that enables a profit, after developer lending, building and admin costs are recovered; Developers will remain disincentivised to rush in, even if the Government needs them too.
There have been lots of steps to move things forward (planning reform, national planning framework, national restoration fund, enabling labourers back into the county etc) but these all take time to take root. We are a county that was built on low rates, learning to live without means we go without till we too adjust.
Increased stock reduces house price growth
According to Zoopla’s latest HPI, July saw a 12% boost in supply, which restrained house price inflation to 1.3%. In response, 8% more buyers than last year were keen to make their move before the summer, shaking off the stamp duty increase to agree a deal.
For those in higher priced; largely southern, regions, the increase in duty has stamped on house price inflation, outside of London; Truro, Torquay and Exeter saw the biggest price falls at -1.3%, -1.2% and -1.1% respectively. Meanwhile Northern Ireland and the northern regions of England and Scotland pressed ahead, properties, for now, remaining relatively affordable in comparison.
Given the UK market as a whole, the oversupply has led the property portal to reduce its growth forecast from 2% to 1%.
Student accommodation finds commitment lacking
Investors who banked on student accommodation being a sure thing post-Covid, find occupation rates fall to 88% as international students rethought where they were educated. Affordability constraints, restrictive visas and a geopolitical tension creating an environment not conducive to learning.
Mortgage approvals rise
Existing borrowers took advantage of falling rates and remortgaged in June. This led to a 200 bump on May’s figures to 41,800 in June, the highest number of approvals since Oct 2022 when seasonally adjusted. Those looking to move on and up the ladder also rose; net mortgage approvals increased by 900, to 64,200 in June as buyers reluctantly accepted the stamp duty rise, adjusting their offer accordingly
When not seasonally adjusted remortgaging was less marked but considerable when compared against the same time last year. At the same time, house purchases continue to pick up post stamp duty lull.
Half yearly results show Taylor Wimpey – working towards
Developer Taylor Wimpey continued to be bogged down by remedial work costs, shoddy workmanship (attributed to a contractor) and a softer market than hoped for. Group completions may have risen 11% in H1 2025 but the average selling price reduced 1.3% to £313k.
Foxtons’ comeback continues to increase revenue
Estate agent Foxtons’ half year results received a boost before the stamp duty gates closed causing the group’s sales revenue to increase 25%. Picking up the seasonal pre-summer slack, lettings revenue also rose by 4%. This all resulted in a 31% rise in adjusted operating profit in H1 2025 to £12.3m. Moving forward, sales are expected to pick up as rates fall further and the lettings market to tick over with increased acquisitions and property management take-ons driving further growth.
Development draws in at disused railway sites
Surplus railway land is to be redirected into new housing, boosting numbers by 40,000 with £1bn of investment. The first arrival destinations: Newcastle Forth, Manchester Mayfield, Cambridge and Nottingham are expected in the next 15 years via Platform 4
Moving on: Monthly property transactions rise in June 2025
Sales agreed in Q1, unperturbed by the increased stamp duty, came to fruition in increased numbers in June 2025 – the number of UK residential transactions ESTIMATED in June 2025 increased by 13% on May 2025 efforts and is 93,530, 1% higher than June 2024. When non-seasonally adjusted this increases to 17% higher than May 2025 and 5% higher than June 2024.
Fined due to the lack of duty
Profit over lives backfires on Dragon Wood Homes Ltd and Paul Whyman, its director, who were sentenced at Ipswich Crown Court for failing to comply with a fire safety enforcement notice when converting a development in Felixstowe from offices to flats.
Development survey confirms affordability is restricting activity
A survey of UK property developers commissioned by Octane Capital found of the 1,003 developers surveyed, a third had paused activity due the market. 40% cited interest rates, 16% planning delays/uncertainty and 14% lender appetite.
Nationwide reports mild house price growth
UK house prices continued to play grandma’s footsteps, tiptoeing a step forward in July after having to retrace their steps previously. According to Nationwide house prices were up 0.6% month on month and rose annually from 2.1% in June to 2.4% in July. The stamp duty increase sunk in; buyers need married with sellers, overcoming the limbo of perpetually waiting, causing transaction numbers to rise.
And that concludes this week’s UK Property News Recap – 01.08.2025. If you have any comments or suggestions, please get in touch .
