This week, non-dom tax changes drove the wealthy out and prime house prices down. Rates held, maintaining the status quo, yet Rachel Reeves’s latest spending review has the construction industry optimistic for future growth. First time buyers’ migration onto the ladder slowed rental growth, yet caution within the wider market continued to hold buyers back and sellers from asking for more. Welcome to another UK Property News Recap – 20.06.2025.
Cladding bosses sold flammable cladding knowingly
According to documents shared with The Sunday Times by Netflix, a senior executive of US company Arconic, which made the cladding on the Grenfell Tower, knew it was dangerous two years before the fire. This same cladding was sold to the government to clad Grenfell, where the disastrous 2017 fire claimed 72 people’s lives.
UK property asking prices fall in June
New seller caution crept in June, with asking prices on the property portal Rightmove dropping by 0.3% to £378,240. Only four out of 11 UK regions increased asking prices; affordability dictated how much sellers can push for more and where. Stock levels were high, up 11% ahead of last year, while demand was only 3%, UK house prices have frozen under the summer spotlight. Economic uncertainty weighs heavy on buyers’ minds despite mortgage criteria easing. Many want reassurance as to when to move while others are making hay; seizing the financial advantage, if affordability isn’t an issue.
Renters’ move onto the ladder weakens rental growth
With rates reduced, renters who’ve saved up a deposit of 10% or more are opting to move onto the housing ladder as opposed to spending another year in rented accommodation. According to estate agent Hamptons, the number of tenant registrations across Great Britain was down 17% on this time last year and is now running 28% below 2019 levels. This has curtailed rental growth despite available rental stock levels increasing 5% since May 2024.
In the capital, first-time buyers have led the movement charge, accounting for 50.3% of new buyer registrations this year. This has resulted in London rents falling 0.5% on the same time last year – below where they were in June 2023. Mortgage repayments now, in some cases, are more favourable than rental payments.
Glenigan forecasts UK construction sector set to grow 24% over the next three years
Rachel Reeves’s latest spending review provides the construction sector funds on which they can build on over time, boosting expected growth in the sector.
The residential housing market is expected to gain momentum after a slow 2025 start, while other sectors remain reliant on consumer confidence returning before further investment is secured. New office space, to lure staff back to the office, and commercial warehouses for online shopping storage remain in demand while retail, community and amenity space investment fall out of favour.
New build estates prove costly to maintain
New build estates sell the dream of a freehold property free from the shackles of leasehold. However, due to local authorities relinquishing responsibility of the estate grounds and roads, the financial burden falls to residents who find themselves paying, not only a service charge, but also council tax. The appointed management company will cost up repairs and their time to ensure a year on year profit. With more new build homes promised and councils unwilling, or able, to fund maintenance, expect the fleecing to continue.
Non-Doms potential reprieve may come too late to save prime prices
Rachel Reeves is potentially trying to find a way of “backtracking without backtracking” on the non-dom changes — with a particular focus on the inheritance tax issue.
For many fleeing, a discount on their home is easier to swallow than the inheritance tax grab. This makes it a great time to secure a discount in prime central London real estate but unless entrenched in the UK with work and/or kids approaching exams, the usual buyers aren’t looking. Many hoping the government thinks twice about some of their non-dom plans before committing one way or the other to move in or out.
London’s non-dom loss is Dubai and New York’s gain
For those who lost patience in the UK government’s tax plans, a move east resulted in Dubai securing 111 super prime sales worth US$1.9bn. For those heading West, New York, achieved 75 super prime sales worth US$1.41bn in Q1 2025. Meanwhile, back in blighty, London saw just 34 such deals (-37%) amounting to US$0.59bn in value.
Inflation holds steady but owner occupier housing costs slow
The Consumer Prices Index including owner occupiers’ housing costs rose by 4.0% in the 12 months to May 2025.
Within owner occupiers’ housing costs, there was a slight reduction in rents that helped contribute to the slowdown in growth while other components remained largely unchanged. For those on the move though, the price of white goods rose and buying a new bed required deep pockets.
The cost of renting a room, leaves many a room spare
The rental website Spare Room found the cost of renting a ROOM in the capital, currently holding at £1,000, is acting as a deterrent to tenants causing the number of would-be flat sharers to fall by 6,500 from a year before to 57,600.
Many under 25s are understandably unable to sacrifice 30-50% of their pay on rent and still be able to survive in London. Faced with this, many are opting to stay with Mum and Dad and / or commute from further afield so as to afford a better existence.
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UK house price growth slumped post stamp duty holiday
Post stamp duty holiday blues stalled house price growth as buyers realised they were now short on additional cash to put their “stamp” on a property. As a result; UK AVERAGE ESTIMATED (LIKELY TO BE REVISED DOWN) prices increased by 3.5%, to £265,000, in the 12 months to April 2025; this annual growth rate is down from 7.0% in the 12 months to March 2025.
In England – the AVG house price increased by 3% to £286,000. In Wales, prices rose 5.3% to £210,000 and in Scotland, 5.98% to £191,000 in the 12 months to April. The more affordable regions continue to drive growth while those long in the tooth continue to struggle to shake affordability issues. That said, London was the only region where the house price annual inflation rate was higher in April 2025 (3.3%) than in March 2025 (0.9%).
UK rental growth strains
Rental growth continued to slow in May but tenants continued to find their affordability thresholds tested.
The average private rent in the UK was £1,339 per month in May 2025; 7% higher than May 2024.
The average rents per region in May 2025:
England -£1,394 up 7.1% (£92) from a year earlier – down annually from a rise of 7.5% to April 2025
Wales- £799 up 8.5% (£63) from a year earlier – down annually from a rise of 8.7% to April 2025
Scotland – £999 up 4.5% (£43) from a year earlier – down annually from a rise of 5.1% to April 2025
Northern Ireland – £848 in March 2025 up 7.7% (£61) – down annually from a rise of 7.8% in the 12 months to February 2025
UK finance finds interest-only lending reduced
A lack of “interest” is established within mortgage lending. Paying down /or out becomes more prevalent in the current uncertain economic environment. As a result, between 2023 and the end of 2024. the number of interest-only homeowner mortgages fell 18.5%, and the number of partial interest-only mortgages by 13%. Those more exposed, with over 75% loan-to-value, reduced in number by 25.7% in 2024.
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Coastal owners struggle to sell with the post covid tide change
The stamp duty holiday accelerated buyers’ 5-10 year plans, with many opting to escape their recent Covid enclosures for greener, more coastal towns. For those fleeing cities, homes further afield, offered more space than buyers were used to. As a result, their perception of local pricing was wrong, many bidding up on properties as comparatively they seemed cheap for the space. Having distorted prices, many of those who moved too soon, thinking the call of the office would never return their call, or bought a second home to service all those holidaying at home rather than abroad, or to provide a part-time escape from city life – when faced with increased council tax and mortgage repayments, are now trying to move out. Yet, with the absence of cheap money, prices can no longer hold these artificial rises. This is leaving many sellers struggling to sell if they haven’t accepted the turn of the wheel.
Calls for the New Homes Ombudsman Scheme to be mandatory
The New Homes Ombudsman Scheme was set up as a VOLUNTARY scheme for developers in 2022. About 65% of developers are signed up. Unsurprisingly, the developments with the greatest number of serious complaints, aren’t. As the government is reliant on construction to “build” up economic growth – making this compulsory is essential. Otherwise the UK will have a whole lot of shoddy new builds and a disgruntled voting public.
No rate change
For those tracking the base rate there was no reprieve this month. The Bank of England voted 3-6 to hold rates at 4.25% with three voting to cut a further 0.25% to 4%. This will maintain the current caution within the UK property market, making for a slow summer and a busier autumn.
House of Lords committee launches inquiry into the Building Safety Regulator
A cross-party House of Lords committee has launched an inquiry into the Building Safety Regulator following widespread reports of delays to scheme approvals. The committee is calling on industry professionals to answer 14 questions about the effectiveness, process, funding and staffing levels to understand the cause of the problem.
(Sometimes the answers are already in the questions.)
An aborted sale could prove costly to landlords
Labour is considering plans to restrict landlords from relisting for a year if a sale falls through. This could backfire for both tenants and landlords alike if properties remain empty needlessly.
5% of all UK properties listed on the market are above a million
The combination of the stamp duty holiday and cheap lending contributed to a 2% rise in properties being listed above £1m since 2019 in the UK. According to Rightmove, this has resulted in 5% of all UK properties on the market being listed at this level or above. London has the largest concentration of homes but Cornwall was reported as seeing the biggest increase since 2019 as Londoners jostled for greener pastures post Covid.
And that concludes another UK Property News Recap – 20.06.2025. If you have any comments or suggestions please do get in touch.
