MARKET INSIGHT
UK property market update for july 2025
July 31, 2025 • Author: Richard Bradstock
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It’s official. The stats are in and definitively, the UK is “a classic buyer’s market”. The dominant section of buyers driving demand are domestic buyers looking for a main residence – a very good bellwether.
Buyers’ markets often follow periods of economic slowdown, rising interest rates or a period of unsustainable price rises, of which the UK has probably witnessed all three over the last five years. But as we always say, the market is not monolithic and to find the best UK property investments investors must apply the old adage location, location, location to exploit current pockets of opportunity. Read on for the best places to buy in the UK in today’s market.
The uk property market in a minute
Top 3 UK Market Highlights
| Key Figure | What It Shows |
|---|---|
|
+5% |
Sales volumes running above 2024 levels — strongest real market indicator |
|
+2.5% |
Year-on-year price increase — contradicts negative headlines |
|
Sub-4% |
Available mortgage rates — showing improving affordability |
Prices this month are up 2.5% year on year, according to Nationwide data, although UK news outlets chose to infer from the same data set that the numbers showed the largest month-to-month fall in asking prices for 20 years. Let’s just unpack this for a minute. Firstly, this is asking prices, not sale prices and secondly, the beginning of summer always seems a dip in prices, typically felt in July where sellers have to work much harder to engage buyers who are jetting off on holiday and fretting how to amuse their children for the best part of two months. The headlines are also highly incongruous with the fact that the latest quarterly data set also shows sales volumes running around 5% above 2024 levels – and this is after the stamp duty rise in April. Clearly, there are 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
Elliot has 16 years of experience in the UK Real Estate Industry working in the UK and the Middle East. He’s been advising clients in how to develop leading portfolios to achieve their goals and personal targets.
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