UK Property Market Update - June 2025 Rightmove Index Breakdown

Why Sellers Are Cutting Prices

More homes are entering the market than buyers, driving the most price-sensitive conditions seen in years. The number of homes for sale is 11% higher than this time in 2024, while buyer demand is only up 3%. This stock surplus means sellers must list competitively from day one to attract interest.

Homes that generate an enquiry on the first day of listing are 22% more likely to sell than those that don't receive interest for over two weeks. In today's market, it's not just about listing - it's about launching smartly.

Regional Winners and Losers

Price changes are not uniform across the country. The South West, South East and London saw the steepest drops, influenced by higher stamp duty rates and a sharp increase in available stock. In contrast, more affordable regions like the North West, Wales, and Yorkshire & The Humber saw modest price gains. These areas are less affected by tax changes and continue to attract strong interest from buyers seeking value for money.

Regional Highlights:

• North West, Wales, Yorkshire: Prices rising slightly - demand and affordability remain strong
• South West, South East, London: Prices falling - higher supply and taxation pressure sales
• London boroughs: Mixed performance - Richmond, Bexley and Lewisham saw gains; Merton and Camden posted the largest annual declines

Buyer Activity and Mortgage Trends

Despite price sensitivity, buyer activity is resilient. May 2025 marked the busiest month for agreed sales since March 2022. This was driven by realistic pricing and strong presentation. Homes that are well priced and move-in ready are still selling - quickly.

Average mortgage rates remain competitive. The current average five-year fixed rate sits at 4.61%, down from 5.04% a year ago. Some lenders have also relaxed affordability tests slightly, making borrowing more accessible, especially to first-time buyers.

What's Happening in Different Buyer Segments?

Rightmove tracks price movements across three key market tiers - first-time buyers, second-steppers and top-of-the-ladder movers.

Average Asking Prices - June 2025:

• First-time buyers: £228,780 (-0.4% monthly, +0.4% annual)
• Second-steppers: £348,290 (-0.1% monthly, +1.3% annual)
• Top of the ladder: £698,503 (-0.8% monthly, +1.3% annual)

The more expensive the home, the larger the price adjustment this month - a reflection of tax pressures and greater negotiation at the upper end of the market.

First-Time Buyer Affordability: Still a Challenge

Affordability is improving slowly for first-time buyers as wages outpace house price growth. However, buying a first home still requires a significant financial commitment. Using average weekly earnings data and a 4.5x income multiple, many first-time buyers still face a gap between what they can borrow and asking prices.

First-Time Buyer Key Metrics:

• Average property price: £228,780
• Typical max borrowing (based on AWE x 4.5): Often falls short of the asking price
• Monthly mortgage vs rent: Ownership remains more cost-effective over time in many areas

Supply Surge - What's Driving It?

Several factors are fuelling the rise in property listings:

• Increased stamp duty on second homes and investments
• Higher council tax rates in popular coastal areas like Devon and Cornwall
• Long-anticipated sales by owners waiting for market stability

This growing supply gives buyers more negotiating power, especially if they are chain-free or have a sale agreed.

Is Now a Good Time to Buy or Sell?

That depends on your situation. For buyers, increased choice and slowing prices provide strong opportunities. Sellers can still secure good sales if they price realistically and launch with strong marketing. With steady market momentum, the remainder of summer 2025 could be active, but success will hinge on smart pricing and speed.

Tips for Sellers in a Price-Sensitive Market

• Price competitively from day one - don't assume room to negotiate
• Use high-quality photos and accurate descriptions
• Make sure your property stands out in a crowded market
• Work with agents who understand local conditions and data-driven pricing

Tips for Buyers Looking to Move This Summer

• Look for homes that are newly listed - these often attract more competitive pricing
• Don't be afraid to negotiate - especially if the home has been on the market more than 2 weeks
• Get a mortgage in principle before you search to move quickly when needed
• Watch rate changes - even small fluctuations in mortgage interest can impact monthly affordability

A Balanced Market With Strategic Opportunities

The UK housing market in mid-2025 is a story of contrasts. While prices are dipping slightly in many areas, sales remain strong where sellers adjust quickly to the new landscape. With mortgage rates steady and buyer interest robust, both buyers and sellers can benefit - if they act with precision.