The UK housing market enjoyed its busiest May ever since the 2021 pandemic bubble, according to the most recent House Price Index (HPI) by Zoopla. Sales agreed increased to a four-year high due to improved mortgage affordability, competitive levels of lending, and a record increase in the number of homes for sale. A key explanation for the resurgence in the market is that there are improved mortgage terms available. Following a tough couple of years in which mortgage rates hit 6% for 2022 and 2023, a reversal of fortunes in the mortgage market in 2025 has lowered rates, unveiling higher levels of affordability for many buyers. Checks on affordability have also been changed to enable housebuyers to take out up to 20% more loan than was available to them before earlier in the year. All of these developments have culminated in high rates of housing activity. May 2025 sales were 6% higher compared to the same month last year, and overall stock levels rose by 13% year-on-year.
UK Housing Market Trends: House Prices Creep Up, but Sellers Must Be Realistic
The average UK house price has risen 1.6% over the past year to £268,250, a rise of £4,330. However, with more competition between sellers, selling realistically is still important. Overall, homes are being sold 3% (£16,000) below the asking price, as has been the case for several months.
Regional Trends: North West Tops for House Price Growth
The North West was the UK’s hottest property market, with Blackburn and Belfast recording 5.8% and 6.1% annual price growth, respectively. Manchester and Liverpool were close behind on 2.5% and 3%. Other hot spots are Wigan (4.4%) and Birkenhead (4.1%).
Despite the high rates of price rise, the North West saw just a 3% surge in properties on the market last year, significantly below the national average. This is compared to a 21% rise in the South West, 17% in London, and 15% in the South East, which indicates rising selling activity in the south.
Homeownership Now a Bigger Priority Than Marriage
New research from estate agent Zoopla has targeted a shift in spending priorities on a cultural level, with young adults being key examples. Nearly half (48%) of couples who are renting are saving to purchase a property, but only 8% are saving to have a wedding. Within Generation Z, 59% had bought a home as their first financial priority, with 6% saving to marry. The changing landscape of homeownership affordability has led some to delay or scale back wedding plans, 21% said they would delay marriage in order to afford a home, and 37% are considering smaller weddings in an effort to save money for a home.
Affordability Crisis: First-Time Buyers Struggle with Deposits
The average first-time buyer (FTB) home in the UK today is worth £259,700, and an average deposit of £56,700 is required. However, widespread myths about deposits remain. Most would-be buyers believe that they will have to save just £27,600, less than half of the true amount. The gap is highly marked in London, where the average deposit is £138,800 but buyers aspire to save just £39,800.
Affordability remains the greatest barrier to homeownership. In the South of England, homes in 8 out of 10 towns cost more than four times the regional annual average. Thus, just 34% of people in the South feel that buying a home in the next five years is possible compared to 43% in the North. Nationally, 73% of respondents said house prices make it harder to save, increasing to 77% in the West Midlands and a massive 82% in London. Only 9% of millennials believe they could afford to buy where they live.
Financial Pressure Causing Relationship Strain
The financial toll of purchasing property is also beginning to appear. Nearly half (49%) of couples reported that arguments over the cost of purchasing a property had occurred. Having to make difficult financial decisions, such as whether to pay for a wedding or a deposit, is now typical for many UK households.
Key Takeaways from a Mortgage Expert
Referring to the information released by Zoopla on home ownership and house prices, Oportfolio Mortgages Marketing and Communication Director Louis Mason had this to say:
“The latest data shows a clear resurgence in buyer confidence, driven by more competitive mortgage deals and relaxed affordability checks. At Oportfolio Mortgages, we’re definitely seeing a real shift in how people are prioritising homeownership, especially among younger buyers who are increasingly choosing to invest in property over other life milestones like marriage. Traditional life events like that (which can often costs thousands of pounds) are not as popular as they once were, and people would much rather invest the money in an asset like a property. While the rise in listings is welcome news for buyers, it’s crucial that sellers price realistically in a more competitive market. With the average first-time buyer still underestimating deposit requirements, expert mortgage advice has never been more important to help navigate the true cost of buying a home.”
Speak With a Mortgage Expert
Whether you are buying your first home, selling or remortgaging, staying up to date with current housing and mortgage trends is critical. With how rapidly the market keeps changing, professional mortgage advice and careful financial planning can make all the difference when it comes to weathering the UK property market successfully or not. If you are contemplating buying property in 2025 and beyond, please don’t hesitate to ring our team of mortgage consultants today. We are on hand to help.
