UK Property Industry Reacts to House Price Surge: What the Latest Data Means for 2025
UK house prices saw their fastest rise since the end of 2022, according to the latest figures released by the Office for National Statistics (ONS). In the 12 months leading up to March 2025, house prices rose by an annual 6.4%, up from 5.5% in February and marking the sharpest increase in over two years.
The increase, which surprised some market analysts, reflects a temporary surge in buyer activity spurred by the stamp duty change implemented in April. With many purchasers rushing to complete transactions before the deadline, March saw a significant spike in demand, fueling price inflation.
Industry leaders have responded to the data with cautious optimism—acknowledging the short-term boost while warning of market volatility and affordability challenges in the months ahead.
Stamp Duty Changes Fuel Market Activity
Nick Leeming, Chairman of Jackson-Stops, attributed the March surge to the rush ahead of stamp duty reform.
“The early months of 2025 have laid a strong foundation for the housing market, driven by rising demand and steady price growth,” said Leeming. “Buyers moved swiftly ahead of the impending Stamp Duty changes, fuelling a notable price uptick.”
He noted that while the pre-deadline rush led to short-term growth, post-reform activity levels will ultimately determine whether the housing market can sustain its momentum through the rest of the year.
“The true test will be activity levels post-stamp duty changes,” Leeming continued. “Sustained momentum could drive a buoyant summer, but without the same time pressure, price growth may soften.”
Still, Jackson-Stops reported that in April, demand continued to outpace supply, with an average of five buyers competing for every new listing, suggesting that buyer interest remains strong even as the market recalibrates.
Government Urged to Tackle Supply Shortage
Leeming also emphasized the importance of government intervention to address the UK’s chronic housing shortage.
“The Government must reaffirm its pledge to deliver 1.5 million homes during this Parliament. Until this happens, the market cannot fully realign to meet the needs of both current and future buyers.”
Without meaningful supply-side measures, experts warn that any upward pressure on house prices will persist—putting home ownership further out of reach for many.
Rate Cuts Make Mortgages More Accessible
Iain McKenzie, CEO of The Guild of Property Professionals, welcomed the ONS data but advised caution in interpreting the figures.
“This latest ONS HPI data is certainly encouraging and aligns with the positive undercurrents we’ve been observing,” McKenzie said. “The recent Bank Rate cut to 4.25%, the fourth in under a year, and subsequent fall in mortgage rates are beginning to make a tangible difference.”
With sub-4% mortgage deals becoming more widely available for those with solid loan-to-value ratios, buyer confidence is on the rise. However, McKenzie emphasized the importance of context, especially given broader economic uncertainties.
“While we welcome this price growth, we must view it within the context of a complex market,” he said. “Geopolitical uncertainties and economic fragility will likely ensure a more measured pace of growth for the remainder of the year.”
He also pointed to a natural market cooling after the stamp duty exemption ended, calling it a “period of adjustment.”
Stock Levels and Seller Expectations
A notable trend is the 10-year high in stock levels, which has increased competition among sellers. While rising house prices may be encouraging, realistic pricing strategies remain crucial.
“Sellers might feel buoyed by the data, but standing out in a competitive environment requires careful pricing,” McKenzie advised. “Overpricing could mean missing the window of buyer interest.”
This sentiment was echoed across the industry, as experts advised sellers not to assume the March boost is the new norm for 2025.
Rental Market: High Demand, Slower Growth
While the property sales market grabbed headlines, the rental market also featured prominently in the latest ONS data. Private-sector rents rose 7.4% year-on-year in April, slightly down from March’s 7.7% rise and marking the slowest rental increase in nearly two years.
Despite the dip, rents remain elevated due to persistent supply constraints and high demand, especially in urban centres.
Tom Bill, Head of UK Residential Research at Knight Frank, said:
“Rental value growth is still stubbornly high due to robust demand and a shrinking supply, as more landlords exit the sector. The Renters’ Rights Bill, while intended to benefit tenants, may unintentionally reduce supply and keep rents elevated.”
Landlord Exodus and Rental Supply Crisis
Nathan Emerson, CEO of Propertymark, reinforced the urgency of tackling rental market pressures.
“We continue to witness, on average, ten applicants for every available rental property. This imbalance has remained largely unchanged for five years and shows no sign of resolving on its own.”
Emerson pointed to the UK’s projected population growth—expected to reach 70 million within five years—as a critical factor that will only exacerbate existing shortages unless action is taken.
“We need a clear and effective strategy to increase rental supply to meet growing demand,” he said. “Otherwise, affordability will continue to deteriorate for millions of renters.”
Zoopla: Price Growth to Cool in Second Half of 2025
Richard Donnell, Executive Director of Research at Zoopla, offered a broader market outlook, noting the divergence between sales and rental markets.
“Rents continue to outpace house price inflation. Accessing home ownership remains a challenge due to high mortgage rates, which is keeping rental demand elevated.”
Donnell pointed out that mortgage stability is slowly returning, which could lead to more first-time buyers entering the market in the coming months. He also observed a slight slowdown in migration-driven rental demand, particularly among international students and workers.
“House prices were boosted over 2024 by more sales and a rush to beat the stamp duty deadline,” he said. “But we expect price inflation to slow over 2025.”
Zoopla’s own data points to an increasing number of homes for sale and a decline in the pace of sales—both signs that the market is heading for a more balanced, slower-growth phase.
“Sellers should keep their feet on the ground,” Donnell cautioned. “Accurate pricing is more important than ever if they are serious about moving in 2025.”
Key Takeaways for Buyers, Sellers, and Renters
The property industry’s reaction to the latest house price data paints a complex picture—one of short-term gains, long-term uncertainty, and critical challenges that still need addressing.
For Buyers:
- Lower mortgage rates and price increases signal a window of opportunity—but caution is still warranted.
- With demand remaining high in popular areas, competition is stiff. Secure mortgage pre-approval and act quickly on desirable properties.
For Sellers:
- The March price surge offers momentum, but overpricing in a competitive environment could stall a sale.
- Lean into accurate valuations and be flexible, especially with high stock levels on the market.
For Renters:
- The slight slowdown in rental growth offers little immediate relief.
- Long-term prospects for rent moderation hinge on policy changes and investment in rental housing.
Outlook: Moderation on the Horizon
With the impact of the stamp duty change fading, the property market is expected to enter a more moderate growth phase. As economic uncertainty and affordability concerns linger, the industry consensus is that while the fundamentals remain sound, overexuberance is unwise.
Whether it's through housing delivery targets, rental reforms, or economic stability, the next six months will be pivotal in shaping how the market performs in the remainder of 2025.
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