This week rates wobbled as inflation rose and the threat of Trump’s tariffs subsided. Huw Pill spoke out against cutting at speed and lenders responded, some increasing rates while others further decreased, leaving borrowers further conflicted on their next move. Welcome to another UK Property News Recap – 23.05.2025
Prices reach new record despite more subdued late Spring market
According to Rightmove’s HPI, sellers asked for on average 0.6% more but were restrained by the number of sellers and the post stamp duty holiday lull, reducing demand. Despite this, agreed sales were 5% ahead of the same period in 2024 by those buyers making hay while future rate-inspired competition is yet to get onboard.
“Trust”ing in UK property
The wealthy continue to put their “trust” in UK property to maintain their privacy and conceal their true wealth. Transparency International found that the owners of at least 236,500 properties across England and Wales, worth at least £64bn, evaded detection by registering their asset as a trust.
Barratt to build Passivhaus apartments in the Capital
Affordable homes find their solar spotlight, getting airtight, pumped and ventilated in the Capital. Developer Barratt and Transport for London’s development arm have collaborated on their first 728 Lo-E homes: 455 on Bollo Lane, near Acton Town Tube station in west London, plus almost 300 at High Barnet Tube station in north London.
Coming soon – a new town near you
In an attempt to boost UK housing numbers; WPI Strategy are identifying potential sites for new towns. Top of their forthcoming list are:
– Milton Keynes
– Leeds
– South Gloucestershire
– Central Bedfordshire
– Wiltshire
– Huntingdonshire
Each site will cost approximately £3.5bn to £4bn per town— equating to £48bn in total, which it “recommends” to be funded both publicly and privately as they encourage a “partnership funding and community development model.”
Commonhold remains challenged by freeholder payoff
The sticking point that is prohibiting commonhold from being realised is the numeration cost to the freeholder via development value potential. This is causing further delays to the leasehold reform bill and could prohibit significant change from the current status quo.
Housing associations join the more funding queue
If it’s not builders it is housing associations. This week housing associations were claiming that without more funds and easing of restrictions they would be forced to reduce their provision.
Huw Phil speaks out against further rate cuts
Huw Phil got on his soap box this week and claimed as a result of rising inflation further rate cuts may not be as forthcoming as many had previously thought. In agreement, some lenders opted to increase rates while others reduced.
Now Trump has turned his attention on other countries and the threat of further excessive tariffs removed; the need for rate speed has diminished, leaving some borrowers’ hopes of a better rate squashed.
The rising cost of Electric, Gas, Sewage and Water put pressure on households in April 2025
Households felt the “heat” as inflation turned the gas up, increasing housing and household services 12-month inflation rate by 7.0% in April 2025, up from 5.1% in March. Trying to flush it away or quenching a parched throat, only made matters worse. On a monthly basis, prices rose by 1.8% in April 2025, compared with a fall of 0.1% a year ago.
House Price rises backed by stamp duty holiday incentives
Boosted by pre-booked stamp duty holiday deals in Northern climes; average UK house prices were estimated by the ONS to have increased by 6.4%, to £271,000 in the 12 months to March.
By region over the year to March 2025 average prices in England increased 6.7% to £296,000. In Wales the rise was more moderate, up 3.6% to £208,000. While, in Scotland the average house was up 4.6% to £186,000 from a year earlier.
In Northern Ireland where price rises are measured each quarter, prices rose 9.5% to £185,000 in Q1.
Rental growth continues to slow
The pace of average rental growth slowed for another month but still managed to squeeze UK renters in April 2025 for just that little bit more.
Average UK monthly private rents increased by 7.4%, to £1,335, in the 12 months to April 2025.
By region, over the course of the year, the average rent for England was up 7.5% to £1,390. In Wales it was up 8.7% to £795 and in Scotland it increased 5.1% to £999.
Over in Northern Ireland renters faced a 7.8% increase to £843 to February 2025.
First time buyers utilise LISAs to boost deposit funds
According to HMRC data obtained by money app Plum, feeding the ISA or LISA piggybank enabled some first time buyers to afford a home up to £450,000 but penalised others for spending more. In 2002 to 2023 first time buyers had more than 50,000 to put towards a home, according to HMRC
Angela Rayner says UK housing target is a stretch
The language around housing targets changed again from ambitions to a stretch this week. Angela Rayner took to the stand to admit Labour’s self-imposed target of 1.5m new homes in five years was a “stretch.”
With build costs up, construction worker numbers low, delays to building safety checks, lack of “affordable” funding, sluggish planning reform, demand wary, funds light, affordability stretched, profit levels low…they didn’t really ever stand a chance in the short term….
UK house price reductions rise in April 2025
Increased stock competition when buyers were suffering from stamp duty post holiday blues hit UK house price aspirations. Analytics company TwentyEA found there were more than 100,000 price reductions in April making nearly 388,000 so far this year; 20.6% higher than YoY.
The remediation blame game
Developer Barratt ended the week with a substantial win. The Supreme Court ruled in their favour over a dispute with engineering firm AECOM. This now enables them to chase them for losses sustained fixing defective buildings, despite them taking on the remediation work voluntarily. “The Court found that the duty to build homes properly under s.1 of the DPA is not just for the benefit of the homeowner, but also the developer who procures the contractor to carry out the work” This is a win for developers but expect further debate on the small matter of “how much!”
The call of the office gives British Land a financial boost
The value of British Land’s commercial properties is reported to have increased 1.5% in the 12 months to March to £9.5bn as the call of the office gathers momentum. This, they claim, is due to a trickle-down effect; boosting rents on good secondary stock, which business owners who can’t get, or afford new premises are turning to.
The divide between those that have and have not is widens
According to the estate agency Savills, last year, 52 per cent of UK first-time buyers had help from their parents to buy property, while the average recipient of financial help was given £55,572. Getting on the property ladder without banking on mum and dad has obviously restricted what and where you buy. It’s also meant first-timers have had to save for longer, delaying homeownership if they even can ever afford too, or hope they find the “one” so they have more financial clout together.
Kensington and Chelsea House Price slump
The prime London property market finds itself tarnished by Brexit and increased taxes – House prices in Kensington and Chelsea fell to their lowest since 2013, the average property falling 15.1% year on year in March to £1.19mn.
And that concludes this week’s UK Property News Recap – 23.05.2025. Any questions or comments, please get in touch.
