MARKET INSIGHT
UK property market update for july 2025
July 31, 2025 • Author: Richard Bradstock
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The UK property market continues to evolve with reports of year on year price rises juxtaposed with significant price drops in Super Prime Central London which is taking on all the characteristics of a proper buyers market.
On one hand demand is predominantly being driven by domestic buyers looking for a main residence and taking advantage of lowering interest rates to do so - a great bellwether for the market as a whole but, as we always say, the market is not monolithic and to find the best UK property investments buyers must apply the old adage of location, location, location and identify areas where there is clear reason and expectation for growth.
Read on to find the best places to buy in the UK in today's market.
The uk property market in a minute
| Market Signal | Latest Data | Market Insight |
|---|---|---|
|
House Prices |
Up to 2.5% Year on Year |
Nationwide data shows strong annual growth despite seasonal asking price dips. |
|
Sales Volumes |
+5% Above 2024 Levels |
Quarterly data shows robust activity even after April's stamp duty rise. |
|
Mortgage Rates |
Sub-4% Available |
Lenders pricing in declining rates; BoE base rate expected to drop to 3.75%. |
Prices this month are up 2.5% year on year according to Nationwide data although UK news outlets chose to lead with the fall in prices in Super Prime Central London. Unpacking this for a second, whilst this is true for areas like Mayfair where prices have dropped UK wide data also shows sales volumes running around 5% above 2024 levels and new buyer enquiries also up. This is despite the new stamp duty regulations coming in in April so clearly there are active buyers in the market and they mean business.
Supporting this rise in sales volumes is the number of sub-4% mortgages on the market, evidence that lenders are pricing in the declining interest rates. Oxford Economics, the respected forecaster and go-to advisory, expect the the Bank of England base rate to be at 3.75% by the end of the year. It’s currently at 4.25%, following the Monetary Policy Committee’s June meeting, the next review scheduled for 7th August. Watch this space.
A game of two halves
What the latest market data also irrefutably reveals is the north-south divide, taking root across the UK when it comes to the property market.
“Average prices in Northern England (comprising North, North West, Yorkshire & The Humber, East Midlands and West Midlands) were up 3.1% year on year, whilst those in Southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) were up 2.2%.” – Nationwide.
| Area | Trend | Key Reason |
|---|---|---|
|
Kensington & Chelsea |
Price correction of -3.3% |
Impact of non-dom status changes affecting super-prime buyers |
|
South West London wealth corridor (Clapham, Putney, Wimbledon, Claygate, Cobham, Croydon) |
Prices holding firm / bucking wider market |
Stability in mortgage markets & return to office mandates increasing demand |
|
Rental Market (esp. in the capital) |
Different story / rents remain strong |
Instant income opportunities in select developments |
This is not to say that investors should steer away from either London or the South East for the capital is a proverbial mixed bag. Whereas Kensington & Chelsea saw the steepest declines in the country, with a price correction of -3.3% compared to this time last year (largely due to changes in the status of non doms, the main buyers of central London superprime), Savills report that the South West London wealth corridor, including Clapham, Putney, Wimbledon and Surrey enclaves like Claygate, Cobham and Croydon “are bucking the wider market with prices holding firm thanks to more stability in the mortgage markets and increasing staying power due to return to the office mandates.” Follow the links to view our current developments within those areas, some of which are instant income producers (kerching!), bringing us nicely onto the rental market, for rents are a different story again, particularly in the capital. Keep up!
Rents rising steadily
| Market | Annual Rental Growth | Key Driver |
|---|---|---|
|
London |
+2.5% |
Steady demand despite modest price rises |
|
UK National Average |
+6.7% |
Limited supply and high tenant demand |
|
North East |
+9.7% |
Strongest annual growth driven by affordability and regeneration |
|
Forecast (2026–2028) |
+3–6% growth expected |
Supply shortages, urban gentrification & super-prime rentals |
Whereas price rise averages for London as a whole might be a little underwhelming, when applied to the rental market, rents are up 2.5% annually in London with the national average at 6.7% in the year to June. Highest annual rental growth remains in the North East at 9.7%. Savills estimate persistent supply shortages (exacerbated by policy and regulation), urban gentrification (particularly in Northern cities like Manchester and Birmingham) and a thriving rentals in the high-end sector (super prime buyers choosing to rent and not buy) will maintain an upward pressure on rental growth, driving it between 3-6% between 2026-2028.
Conclusion: The RPA View
In a buyer's market, savvy investors are presented with a rare window of opportunity. With asking prices softening, greater choice, and motivated sellers more open to negotiation, the conditions are ideal for acquiring quality assets below peak value.
As mortgage rates gradually ease and demand builds in anticipation of recovery, purchasing now allows investors to capitalise on long-term capital growth and strong rental yields. For those who act decisively, today's market may offer the best value we’ll see for years.
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About the author
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals.
Founder & Managing Director
richard bradstock
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