This week, building foundations proved shaky, leaving many new homes at the planning stage and targets out of the government’s sights. The various attempts to help buyers onto the ladder were shown to be counterproductive in different ways; Help-to-Buy for leaving many flat owners out of pocket and Right-to-Buy for leaving future generations short on social housing. The base rate reduced down to 4% but many are still feeling the financial heat. A Labour minister got burnt for not practicing what she preached and Halifax spun a tale of house price rises to varying degrees across the country. Welcome to another UK Property News Recap – 08.08.2025.
Right-to-Buy leaves little behind
Right-to-Buy proved a costly giveaway for the taxpayer who must now compensate for the government’s inability to reinvest at the time. A Common Wealth report calculated that £194bn homes were sold at a discount averaging 43% between the years 1980-81 and 2023-24. These same homes were estimated to be worth £430bn today
Connell real estate got a Q1 boost from first time buyers
Despite a drop in pre-tax profits in the first half of the year for the Connells – Skipton Group – from £157m to £135.1m, increased activity from first-time buyers at the start of the year boosted profitability for the Connells section. This resulted in pre-tax profits of £28.4m for the Connells arm, up £8.4m on last year’s first half year results.
Affordability and weak demand means building on housing supply is disabled
Sales of ready-mixed concrete fell by 11.5pc in the three months to June against the previous three months, according to data from the Mineral Products Association. The Building Regulator and planning sign off delays may contribute to the development slowdown but if developers can’t sell for a profit, nothing will get built.
Prime Central London house price losses
According to Coutts, discounts marginally reduced as some sellers priced more realistically to enable sales in Prime London in Q2 2025. That said, some sellers still need to have their ego dented first. Others believing, that if they are going to get their price chipped they may as well give themselves some room to soften the blow. This resulted in transaction numbers diminishing in late spring, and many returning to the rental market.
Help-to-Buy proves unhelpful
Flat purchasers in certain blocks have seen their dream of homeownership shattered. Cladding issues, fire and safety remedial works, increased ground rent and spiralling service charges have devalued certain purpose-built properties which buyers paid a premium for in the first instance.
Today, the government is keen to get developers building but if public opinion is wary of new build flats, the incentive to buy is further diminished. Until trust is restored, development will further stall.
Stamp duty dodge proves costly
A new court judgement put paid to those attempting to clawback stamp duty on properties by claiming they are inhabitable when in fact they just need renovating.
Computer says no…
Since 2019, Homes England has thrown £117m of taxpayers money at upgrading software in an attempt to streamline the affordable homes programme. From this, by connecting the external consultant dots, the only thing to “evolve” was a picture of incompetence, in-house fighting and the reliance on Excel spreadsheets. Another setback throwing Rayner’s housing targets off
Construction lay down tools
Rising material and labour costs resulted in further layoffs, which combined with a slow down in demand drew out construction completion times, leading to the sharpest contraction in over five years at the start of the third quarter in S&P Global UK Construction Purchasing Managers’ Index.
As a result the great build revolution has some way to go...but construction hopes are now pushed back, again, to 2026 (when rates are also hoped to be lower, generating further investment.)
Average house prices increase according to lender Halifax in July
According to Halifax HPI, house prices bloomed in the month of July, up +0.4% making the average property price now £298,237 compared to £297,157 last month. Despite the headline figure from the lender rising, growth was scattered across the country. Yet again Northern Ireland led the annual charge; prices up 9.3%, Scotland 4.7% and Wales 2.7%. Meanwhile, down in the South West and East prices only edged up 0.2% & 0.5% respectively.
Labour minister gets caught not practising what she preaches
Labour *homelessness* minister Rushanara Ali got in trouble after evicting her tenants and then relisting it for rent for £700 more than the outgoing tenants were paying, when she was unable to sell. The optics around this are terrible and as a minister waxing on about homelessness this was a big mistake, which cost her her job. That said, it just demonstrates what every other landlord is doing now, when they can’t sell. Rent for another year, at an increased market rent that reflects new tenancy rates and hope for a better price when/if rates reduce further next year.
Division over base rate cut leads to concern for future movement
The Bank of England voted to take another step down from tabletop mountain to 4% after the MPC voted, 5/4 in favour. Overall, the “MPC judged that the upside risks around medium-term inflationary pressures had moved slightly higher since May.” This led to four members preferring to hold the Bank Rate at 4.25% but they were outvoted by another four opting for a 0.25 reduction and one vote for a 0.5 percentage point reduction in Bank Rate. This division could further curtail hopes for a steady reduction moving forward leading to a sticker housing market than hoped come autumn with potential tax rises adding to buyer caution.
In reaction to the latest drop, it has however nudged interest rates lower. The average two-year fixed mortgage rate dropped below its five-year counterpart for the first time since September 2022 according to Money facts.
Safety Regulator blame game
RICS confirms the construction industry as stagnant. Their recent survey showed that in Q2 “its headline measure of total workloads edging down to -3, from -1 the previous quarter.” The blame is laid at the building safety regulator for delays but the regulator has counted with 70% of applications being rejected due to them not meeting legal requirements. Both parties need to up their game if they want to constructively move forward.
Government comes up short in the pursuit of power
In an attempt to power up the UK, the government is planning to offer £25o for 10 years as sweetener to homeowners that live within a kilometer of a pylon. The saving does little to dent the discount homeowners will have to take when reselling.
And that concludes this week’s UK Property News Recap – 08.08.2025. Any comments or suggestions, please get in touch.
