According to ONS, the annual growth rate of home prices is cut in half to 3 to 5 percent

In the 12 months ending in April, the average price of a home in the United Kingdom increased by just 35 percent, as buyers were discouraged by changes in stamp duty

How does the remainder of 2025 look?

The Office for National Statistics (ONS) reports that the UK's annual house price growth has halved, with prices increasing by only 3 to 5 percent in the year ending in April.

This came after home prices increased by 7% in the 12 months leading up to March 2025.

Today, the average cost of a home is £265,000.

The UK's annual house price inflation has slowed for the first time since December 2023. According to the ONS, it resulted from a price decline that occurred between March 2025 and April 2025, coinciding with adjustments to stamp duty.

Since the ONS data covers both cash and mortgaged transactions, it is the most complete of the house price indices. The processing of conveyancers' submissions to the Land Registry following a sale takes some time, so there may be a two-month delay.

Halifax reported a 0.4 percent decline in May property prices, which represents a further decline in annual growth to 2.5 percent (down from the lenders' 3 3.2 percent reading in April). In contrast, Nationwide reported that real estate prices increased by 3 points to 5% in the year ending in May, up from 3 points to 4% in the previous month.

The UK housing market is still recovering from the stamp duty cliff edge in April, but an overhang of supply is keeping prices firmly in check, according to Tom Bill, head of UK residential research at Knight Frank.

The head of personal finance at Hargreaves Lansdown, Sarah Coles, notes that the ONS indicates that the pace of annual price increases has been increasing since the end of 2023, so the slowdown is noteworthy.

However, it was always anticipated in the wake of the stamp duty holiday, so it might not be anything to keep sellers up at night, she continues. The exorbitant price of real estate also prevented price increases during the holiday, so there was neither a sharp increase nor a sharp decline. It was more like a slow ascent that was followed by a leisurely descent.

How does the rest of this year look for the real estate market?

A number of variables, including mortgage rates, the status of the economy, and whether or not buyers are concerned about future tax increases, will determine how much a home will cost for the remainder of this year.

Although rates are predicted to stay at 4 points 25 percent, the Bank of England will make its next interest rate announcement tomorrow, June 19.

According to Bill at Knight Frank, the "weak state of the UK economy is putting downward pressure on mortgage rates, which should support demand in the short term," even though he does not anticipate a rate cut before August.

The mortgage market appears healthy, according to Mark Harris, CEO of the mortgage broker SPF Private Clients.

"Lenders are demonstrating that they are eager to lend and have abundance of liquidity. With some lenders continuing to lower rates and loosen criteria, mortgage rates are generally stable, enabling borrowers to take on larger mortgages than they might have been able to do only a short time ago.

In terms of assisting first-time buyers in particular, there are indications of innovation, which is beneficial for the housing market's general health because it allows those at the top of the ladder to make their moves.

In the upcoming months, house prices should be supported by comparatively low mortgage rates, particularly when compared to recent years.

Some purchasers might be holding out for further rate reductions, though.

According to Darrell Walker, group sales director at CHL Mortgages for Intermediaries and Chetwood Bank for ModaMortgages, "There are probably some potential buyers who are waiting for rates to drop before entering the market because the Bank of England is anticipated to maintain the base rate at 4.25 percent tomorrow, adopting a cautious stance in the face of ongoing inflation and unpredictability on a worldwide scale.

"As activity picks up steam, what buyers and sellers could do without this summer is a rerun of last year and a game of guess the tax rise ahead of the autumn Budget," Bill says, highlighting yet another possible threat to the real estate market.

With the spring/summer market being traditionally a time when people move and the market is at its busiest, Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, is optimistic about the coming months.

In the core price ranges, there is still a lot of money and desire to purchase, she continues. It's surprising to learn that, despite the stamp duty holiday ending, we are seeing an increase in first-time buyer activity.

Many are getting assistance from family members, and this is probably due to the rental market's pressures, where demand is much higher than supply and rental listings have drastically decreased as landlords are leaving the market.