UK House Prices Rise With Strong Performance in May 2025 after Stamp Duty Deadline

House prices in the United Kingdom saw an impressive rebound in May 2025, climbing by 0.5 per cent compared to the previous month. This unexpected increase brings the average property price to £273,427, nearly matching the record highs achieved during the summer of 2022. The rise defied economists’ earlier predictions of just 0.1 per cent growth, marking a significant recovery after the dip in April following changes to stamp duty laws.

The decrease in prices during April, which saw a 0.6 per cent drop, was attributed to buyers rushing to finalise transactions before higher stamp duty rates came into force. Analysts now believe this decline was temporary and driven by short-term distortions, with the housing market showing strong signs of recovery as mortgage rates stabilise and wage growth fuels buyer confidence.

According to industry experts, mortgage availability and rates have played a vital role in supporting the housing market. Anthony Codling, a housing analyst, noted that the steady fall in mortgage rates, coupled with increasing household incomes, has buoyed consumer confidence. Despite global economic uncertainty, the underlying conditions remain favourable for potential homebuyers in the UK.

Latest data from Nationwide suggests market activity continues to strengthen. Zoopla, the property search platform, revealed that estate agents are now handling their busiest sale pipelines in four years, with a 13 per cent increase in properties available for buyers compared to spring 2024. The extra supply is expected to moderate price growth, with Zoopla forecasting an average increase of 2 per cent for 2025. Some analysts, however, remain more optimistic, projecting stronger performance driven by improving affordability.

First-time buyers are a key segment of the market but continue to face significant financial pressure. Research by UK Finance highlights that affordability remains stretched, with borrowers committing an average of 23 per cent of their income to mortgage repayments. This is close to the levels witnessed during the height of the global financial crisis in 2008, despite widespread extension of mortgage terms to reduce monthly costs. The average first-time buyer mortgage now spans 31 years, with many stretching terms as far as 40 years to secure their dream home.

Parental financial support has become a critical factor in the housing market. Many first-time buyers are reliant on funding from the so-called Bank of Mum and Dad to afford deposits and reduce borrowing requirements, further underlining the challenges posed by rising property prices and constrained affordability.

The revival in market activity offers hope to buyers, sellers, and housebuilders alike. If current trends persist, the UK housing market appears poised to weather wider economic uncertainties and deliver continued growth in the coming months, providing a renewed outlook for the sector.