The Zoopla House Price Index for June showed that sales agreed in the last four weeks were up 6% annually, bringing more buyers into the market across all regions and countries in the UK.
Further, the stock of new homes for sale was up 14% and there was an 8% increase in the flow of new supply coming to market. This aligned with a 7% rise in buyer demand.
More supply keeps house prices down
This was amid an easing in house price growth, with just a 1.4% or £3,690 increase since last year to an average of £268,400 in May. This was higher than the 0.3% growth recorded last year, but lower than the 2% rise seen in February.
Zoopla said people were price-sensitive, while the higher cost of living and interest rates were impacting affordability and limiting house price growth.
It also said the increase in housing supply was suppressing prices.
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In London, the South East and South West of England, Zoopla found that the number of homes up for sale was between 16% and 19% higher than last year. However, house prices were relatively static and just 0.5% up on 2024.
By contrast, areas with less housing supply – such as the North, West Midlands and Scotland – saw an above-average price growth of 2% to 3%.
House prices were also found to be rising faster in areas that were typically more affordable, while more expensive regions were recording slower growth or declines in prices.
Where average house prices are between £200,000 and £250,000, house prices were 1.9% higher, while in regions with homes valued below £200,000, the house price growth was around 2.7%.
By contrast, where average house prices are more than £500,000, house prices were seen to fall by 0.2%.
Serious sellers need to be realistic
Richard Donnell, executive director at Zoopla, said: “The number of buyers and sellers agreeing home sales continues to increase year-on-year, demonstrating a continued desire of more households to move home in 2025. Improving mortgage affordability will support buying power in the second half of the year.
“However, buyers remain price-sensitive, especially in higher-value markets where the number of homes for sale has grown the most in the last year, boosting choice for homebuyers. Serious sellers need to be realistic on where they set their asking price in order to achieve a sale and secure a home move in 2025.”
“The market remains on track for 5% more sales in 2025, but house price inflation will remain between 1% and 2%,” he added.
Sara Palmer, sales and distribution director at Shawbrook Retail Mortgages, said houses rose in line with the usual summer uplift in activity.
She added: “Whilst there were concerns earlier in the year that the stamp duty deadline might cause a bottleneck of demand, this doesn’t seem to have played out as severely as suspected, with sales being agreed at the fastest rate in four years. This will likely encourage further confidence in the market and empower buyers to take their next steps.
“The continued noise around 90% LTV mortgages, interest rates holding at 4.25%, and less stringent affordability testing means that we will likely see activity continue on a positive trajectory for the next few months. However, the government will still need to address the lack of support for first-time buyers, seeing as the Mortgage Guarantee Scheme is still the only helping hand available to those trying to get on the property ladder. Whilst the push for housebuilding will certainly help in the long term, something needs to be done soon to ensure sufficient support is given to those looking to start their property journey.”
Nathan Emerson, CEO of Propertymark, said: “It’s encouraging to see further house price growth, as people continue to approach the buying and selling process with improved certainty. Although we are still seeing elevated base rates currently sitting at 4.25%, we are starting to see some high street lenders offering sub-4% mortgage deals.
“We have witnessed the recent announcement of a National Housing Bank, which hopes to combine a public investment of £16bn and a potential private investment of £53bn to help make 500,000 new homes a reality, which will likely be universally beneficial to all when it comes to homeownership.”
