The UK housing market continues to show steady forwards momentum as buyer demand builds, although sticky inflation is keeping some on the fence ahead of further base rate cuts.
The latest data from the Office for National Statistics has revealed a 3.5% annual increase in house prices in the year to April, bringing the average sold property price to £265,000.
While this growth might be slower than the 7% annual boost seen in March, the result is largely due to the acceleration experienced in March as buyers rushed to get purchases over the line ahead of the 1st April stamp duty change, which created unusually high March sales volumes.
The pattern is similar to that seen in autumn 2021, where buyers temporarily flooded the market to complete transactions before the October 2021 stamp duty changes.
Demand building “beneath the surface”
Numerous factors are having an impact on the housing market at the moment, creating some ambiguity and a year that has not followed ‘normal’ seasonal patterns so far.
These range from higher mortgage rates (although not historically so), ongoing affordability difficulties for first-time buyers, inflation and the cost of living crisis, and the ensuing economic uncertainty.
Nathan Emerson, CEO of Propertymark, commented: “The first half of 2025 has proven very different from the expected trends we would normally witness within the housing market each year.
“We had the effect of stamp duty threshold changes across England and Northern Ireland completely alter consumer habits. The housing market witnessed a sizable uplift in both mortgage approvals and property transactions, as many people looked to complete on their house purchase, leading towards the start of April.
“As we progress further into the traditionally busy summer period, we are likely to see momentum regarding house prices; however, this will likely depend on consumer affordability and confidence. Many people will rightly be closely watching the Bank of England, as they make their next decision on the base rate tomorrow afternoon.”
According to Jonathan Handford, managing director at Fine and Country, the latest price increase suggests a housing market “gradually regaining momentum”, and this is supported by a more stable economic outlook along with pent-up demand.
“Looking ahead, further progress on inflation, clear policy direction, and a renewed focus on affordability will be essential to sustaining momentum,” he added. “With demand quietly building beneath the surface, the right conditions could help unlock a more inclusive and stable recovery.”
Strong and stable housing market
Despite the headwinds, the UK housing market remains in a “strong, stable position”, according to Paresh Raja, CEO of Market Financial Solutions – even if the Bank of England decides to hold interest rates at 4.25% tomorrow.
“Ultimately, it was always going to take time for buyers and investors to adjust to the base rate rising from record-lows to 17-year highs, but all signs suggest that they have adapted over the past year or so, and the steady rise in house prices underlines that demand is still there,” Paresh added.
“If indeed we do see one or two more base rate cuts by the end of the year, the strong foundations are there for the market to really kick on from.
“Lenders have to be responsive. Products must adapt in line with the needs of borrowers and the economic conditions, ensuring brokers and borrowers can move at speed and get deals done.”
With so much change affecting the housing market, which continues to show resilience Babek Ismayil, founder and CEO of OneDome, believes the sector is continuing to rebalance, but thinks limitations in the housebuying process are also holding back recovery.
“Buyers aren’t just battling financial pressures — they’re stuck with a homebuying process that’s slow, fragmented, and outdated,” he said. “Even those who can afford to move are being held back by legal bottlenecks, missed deadlines, and a lack of transparency.”
