The property market and predictions at a glance (as of July 2025)
| Metric | Current Status |
|---|---|
| Asking Prices | Down 1.2% in July (biggest July drop in 20+ years) |
| 2025 Forecast | Lowered to +1% (Savills) or +2% (Rightmove) |
| Sales Agreed | Up ~5% year-on-year |
| Buyer Enquiries | Up ~6% year-on-year |
| Real-Term Prices | Falling (house price growth below inflation) |
| Long-Term Outlook | +24.5% price growth forecast (2025–2029) (Savills prediction) |
| Regional Trends | London cooling; regions like the North West stronger |
What are the current trends in asking prices?
In July 2025, asking prices recorded their steepest monthly drop for that month in over two decades. Prices for newly advertised homes fell by 1.2%, averaging £373,709—a £4,531 drop from June. London was hit harder, with Inner London asking prices falling by 2.1%, and the broader London area down by 1.5%.
This sharper-than-usual seasonal dip is mostly due to the flood of properties currently on the market. There are now more homes listed for sale than at any point in the past ten years, forcing sellers to lower their prices to attract interest. It’s not that buyer demand has evaporated—it’s just that competition among sellers is fierce.
Why is the outlook for house prices so cautious?
There’s now a growing consensus that house prices will barely rise this year. Major forecasters like Savills and Rightmove have both cut their 2025 estimates:
Savills has reduced its forecast from 4% growth to just 1%.
Rightmove has dropped its own expectations from 4% to 2%.
Several factors are driving this cautious tone. Globally, uncertainty linked to President Trump’s new tariff war and concerns about future tax rises have cooled sentiment. Savills highlighted that geopolitical issues and economic jitters have curbed buyer activity over the past few months, despite affordability improvements.
What’s happening with sales-agreed?
Here’s the twist: while asking prices have dropped, the number of homes going under offer is actually rising. Sales agreed are currently 5% higher than this time last year, and buyer enquiries are up 6%.
That tells us that although sellers are lowering their expectations, the market is far from frozen. Buyers are still active—particularly those capitalising on slightly lower mortgage rates and more choice on the market. It’s a buyer’s market, and they know it.
Why the mismatch between asking prices and sales-agreed?
This divergence boils down to supply and demand dynamics. The post-lockdown housing boom saw record demand outpace supply, pushing prices up sharply. But in 2025, the trend has reversed. There’s now an oversupply of homes on the market.
Buyers are being choosier, while sellers are adjusting their prices to compete. Rightmove has noted that sellers are responding to this environment with “stand-out pricing” to catch the eye of cautious buyers.
At the same time, improved affordability and falling interest rates are helping deals to be agreed, even if asking prices are coming down.
Are house prices falling in real terms?
Yes. While headline figures show mild price growth—Nationwide reports annual house price inflation has slowed to 2.1%—inflation is still running at 4.1%. That means in real terms, house prices are actually falling. So even if nominal prices are stable, the actual value of homes is shrinking once inflation is factored in.
What’s the outlook beyond 2025?
Despite this year’s cooling, Savills has a fairly optimistic long-term view. Its updated forecast now expects UK house prices to rise by 24.5% between 2025 and 2029, a slight upgrade on previous projections. This is largely thanks to:
Falling interest rates
Eased mortgage affordability tests
A likely rebound in transaction volumes
However, Savills did note that the very top end of the market may lag behind if wealth taxes are introduced, particularly targeting properties valued over £2 million.
What does this mean for sellers and buyers?
If you’re selling: price smartly. The high number of competing listings means overpricing your home is likely to backfire. Homes that are priced competitively are still getting strong buyer interest.
If you’re buying: it’s a good time to look. Not only is there a wider choice, but you may also benefit from better mortgage rates and motivated sellers. While prices may not crash, the leverage is shifting your way.
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Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
