Following the release of this morning’s House Price Index (HPI) by the Office for National Statistics (ONS), new data shows that average UK house prices rose by 3.9% in the 12 months to May 2025, reaching £269,000.
In response to the release, industry experts have shared their insights on what this means for the sector moving forward.
Kevin Roberts, Managing Director, Mortgage Services, Legal & General:
“Momentum is building in the housing market, driven by competitive mortgage rates and an increase in mortgage approvals this year. Confidence may be further boosted by the Leeds Reforms, which aim to support first-time buyers and those looking to remortgage.
This market highlights the importance of seeking professional mortgage advice, especially as first-time buyers now account for 64% of mortgage searches, according to our broker data. Those who seek expert advice now are best positioned to take advantage of opportunities in this fast-moving market.”
Nathan Emerson, CEO, Propertymark:
“Rising house prices can indicate growth in the housing market and improved financial stability for some, especially as banks begin lowering mortgage rates to stimulate demand.
However, more needs to be done to strengthen Britain’s housing market and make homeownership a realistic goal for first-time buyers. Reports suggest that Stamp Duty hikes, implemented in April, are having a negative impact, with some buyers paying an additional £6,000–£12,000. There are even calls for more flexible Stamp Duty payment options.
While the tax increase was introduced to help balance public finances, it may be discouraging potential homeowners. The Government should listen to industry professionals who are seeing the real-world consequences of this policy.”
Hamza Behzad, Business Development Director, Finova:
“As we enter the second half of 2025, the UK housing market continues to demonstrate resilience, despite a shifting economic backdrop. The anticipated slowdown following the end of tax breaks has not dampened demand—buyer activity remains strong.
The upcoming Mortgage Guarantee Scheme will likely boost activity further, empowering more first-time buyers to get on the property ladder. There’s growing appetite across the sector for easing certain regulations. If managed properly, raising risk thresholds slightly could help more buyers qualify for mortgages.
Lenders and brokers must collaborate to offer flexible, forward-thinking solutions. With the return of 100% LTV products, quick, well-assessed decisions will be a key differentiator in today’s market.”
Darrell Walker, Group Sales Director, Chetwood Bank (ModaMortgages and CHL Mortgages for Intermediaries):“Another month of annual house price growth — and a return to monthly growth — underlines the market’s resilience. However, the pace has slowed notably since March’s two-year high, suggesting that sentiment, while positive, remains fragile.
Buyers and investors have become more selective, seeking properties that offer both short-term value and long-term potential. This reinforces the idea that we’re still in a buyer’s market, shaped by elevated borrowing costs and uncertainty around the Bank of England’s next move.
Still, many buyers aren’t waiting on rate cuts. The continued rise in prices confirms that demand remains. Lenders must offer bespoke, flexible solutions to help brokers and clients act on emerging opportunities. That will be crucial, regardless of the Bank’s next decision.”
Jonathan Handford, Managing Director, Fine & Country:
“Healthy house price growth is welcome news for sellers, especially those concerned about a flatlining economy.
The volatility seen in spring — largely due to Stamp Duty changes — is fading, and buyer sentiment is improving. This is reflected in data from RICS, which reported that buyer demand turned positive in June for the first time since December 2024.
Annual house price growth is on track to reach between 2% and 4%, and while the market appears flat, buyer enquiries are likely to pick up through the year — provided interest rates continue to decline.
Today’s surprise inflation increase could delay further base rate cuts, potentially deterring some buyers. However, the high cost of renting continues to make buying a more attractive option.
In the prime market (properties over £750,000), price drops have driven a surge in demand, as buyers seek high-value homes at reduced prices.”
Holly Tomlinson, Financial Planner, Quilter:
“The latest HPI data shows that average UK property values rose by 3.9% annually in May, up from 3.6% in April, reaching £269,000. While this marks modest acceleration, it follows a period of volatility triggered by April’s Stamp Duty Land Tax (SDLT) changes.
However, this morning’s inflation surprise has reintroduced uncertainty. Lenders had begun cutting rates in anticipation of further base rate reductions, but the unexpectedly high CPI figure may delay that.
Affordability remains a critical challenge, especially for buyers relying on fixed-rate mortgages. The market is finely balanced, with its direction hinging on the Bank of England’s decision in August.
Nationwide’s move to expand access to its ‘Helping Hand’ mortgage is encouraging, but it underscores how limited current support is for first-time buyers. While the Chancellor’s Leeds Reforms may ease lending restrictions, their impact will be modest unless they address the root cause: unaffordability.
Making the Mortgage Guarantee Scheme permanent under the ‘Freedom to Buy’ initiative is a bold-sounding move, but without increased housing supply, it may have limited effect.
Expanding high loan-to-value (LTV) lending also raises the risk of default and negative equity — a shaky foundation for first-time buyers.
The most effective long-term solution? Build more homes. Without a serious commitment to increasing supply, policy changes will only go so far.
Finally, it’s worth noting that the current data reflects transactions that began months ago and may not capture recent shifts in buyer sentiment or expectations for rate cuts later this year. The summer months also typically bring a seasonal slowdown as house hunting takes a back seat to holidays.”
Colleen Babcock, Property Expert, Rightmove: “May was the busiest month for agreed property sales since 2022, as the market rebounded after the temporary lull caused by the Stamp Duty increase. It’s a price-sensitive market, with a decade-high number of homes available for buyers to choose from.”
Matt Smith, Mortgage Expert, Rightmove: “Inflation came in slightly higher than expected this morning, but we’re still on track for a peak this summer, followed by a decline, as forecasted by the Bank of England.
The average two-year mortgage rate is now 4.53%, down significantly from 5.34% this time last year. With two further Bank Rate cuts still possible this year, we could see mortgage rates fall even further.”
