UK property market update: Spring – Summer 2025

As we move through spring and into summer 2025, the UK property market is poised for a dynamic few months. With a range of factors shaping the market – such as interest rates, stamp duty changes and regional variations, it’s essential for prospective buyers to stay informed.

Whether you’re considering a new-build home or simply exploring the market, it’s important to understand how these factors might impact your property journey. Here’s an overview of what’s happening in the market and how you can make the most of it, particularly if you’re based on the South coast and interested in a new-build home.

House price growth

National outlook: Rightmove continues to forecast a 4% increase in new seller asking prices throughout 2025. This positive outlook is driven by improved affordability and a buoyant market, making it an ideal time for prospective buyers to consider securing their dream new build home. In April 2025, the average asking price reached a record £377,182, showing a 1.3% annual increase. Buyer demand is up by 5% compared to last year, and new listings have increased by 4%, indicating a healthy market with plenty of opportunities.

However, Zoopla suggests a more modest 2.5% rise in UK house prices by the end of the year, reflecting regional variations. This underscores the importance of understanding the local property landscape, particularly for new builds in areas with higher demand.

The South East perspective: The South East, a reliably high-demand area, continues to see strong interest. While growth in this region may be slower compared to areas in the North, it remains a desirable location due to its proximity to London, excellent transport links, and thriving local economies. For new-build homes, this presents an opportunity for buyers to invest in properties that offer long-term value, great connectivity, and desirable community amenities.

Mortgage interest rates

Mortgage rates play a significant role in the property market. As of late April 2025, the average two-year fixed mortgage rate across all loan-to-value (LTV) ratios is 5.23%, and the average five-year fixed rate stands at 5.12%. However, some lenders are offering lower rates, such as 3.89% for two-year fixed deals with a 60% LTV. The expectation is that mortgage rates could fall closer to 4.0% by the end of 2025, making mortgages more affordable and increasing the potential for buyers to secure favourable deals.

Impact on the South East: For buyers in the South East, where property prices tend to be higher, the reduction in interest rates could have a significant impact. Lower mortgage rates will make larger loans more affordable, helping prospective buyers access financing more easily. This creates a golden opportunity to explore new build homes in the region – buyers can take advantage of lower monthly repayments and potentially secure their ideal property in a prime location.

Stamp duty changes

On 1 April 2025, important changes to Stamp Duty Land Tax (SDLT) thresholds came into effect across England and Northern Ireland. The standard nil-rate threshold was reduced from £250,000 to £125,000, meaning more buyers now face higher upfront costs. For first-time buyers, the 0% threshold decreased from £425,000 to £300,000, with a 5% rate applying on the portion between £300,001 and £500,000. If the purchase price exceeds £500,000, standard SDLT rates apply. Additionally, the surcharge for second homes and buy-to-let properties has increased from 3% to 5%.

These changes have already impacted the market. In April 2025, house prices saw a slight decline of 0.6% month-on-month. This drop is attributed to the rush of buyers completing transactions before the new stamp duty thresholds took effect. Despite this cooling effect, experts anticipate a gradual recovery in the market during the summer, creating a promising opportunity for those considering purchasing a new build home.

South East considerations: For buyers in the South East, understanding these changes is key. The region’s higher property prices mean that even minor changes in stamp duty can significantly affect transaction costs. For instance, a £300,000 home now incurs £3,450 in stamp duty, compared to £950 under the previous rules. Although these increased costs may affect affordability in the short term, buyers can still benefit from investing in new-build homes that offer modern energy efficiencies, high-quality finishes, and long-term value.

Regional variation

The UK property market exhibits regional variations, and these differences have a direct impact on local trends. As of early 2025, the North West saw the highest annual house price growth, with an 8.0% increase in the 12 months to February 2025. Meanwhile, the South East saw a more modest 1.7% annual increase in house prices during the same period.

These regional differences highlight the importance of focusing on local trends. While the South East may see slower growth compared to the North, it remains an attractive location for new-build homes. With its desirable amenities, proximity to London, and strong economic hubs, the South East continues to be a prime area for developers and buyers alike.

Opportunities in the South East: Despite slower growth predictions, the South East remains a desirable location due to its proximity to London and strong economic hubs. Developers can capitalise on this by focusing on quality developments that meet local demand for amenities and lifestyle.

Despite slower price growth predictions, the South East remains one of the UK’s most sought-after locations, thanks to its excellent infrastructure and lifestyle amenities. For buyers considering a new-build home in this area, the South East offers a wealth of opportunities. Developers are focusing on building homes that cater to modern living, with energy-efficient features, spacious layouts, and strong community engagement.

For prospective buyers, investing in a new build in the South East provides the advantage of buying into a community that continues to evolve with growing infrastructure, high-performing schools, and plentiful green spaces.

Market activity

Rightmove predicts around 1.15 million completions in 2025, up from recent years. This suggests a thriving market, with continued demand for homes. Although there has been some limited cooling in the market, with house prices falling slightly by 0.6% in April, the overall trend points to steady market activity. Buyer demand has risen by 13% year-on-year, and sales have increased by 12% compared to the same period in 2024. Buyers are becoming more price-sensitive due to rising mortgage rates, but this also means there are opportunities to negotiate and secure a fair deal.

South East market: Buyers in this region are looking for high-quality new builds that offer long-term value, modern design, and energy efficiency. Developers are responding to these requirements by prioritising the construction of superior homes in desirable locations, with plentiful amenities nearby. So, 2025 is a good time to buy a new-build home and secure a property that will provide value for years to come.

Conclusion

As we move into summer 2025, the outlook for the UK property market is mixed but with plenty of reasons to be optimistic. While recent data shows a small month-on-month decline in house prices in April, largely due to the stamp duty changes, the market is expected to stabilise over the coming months. Lower mortgage rates and a gradual recovery in house prices will continue to support prospective buyers in securing their ideal property, particularly in the South East.

For buyers seeking a new-build home, the South East remains an attractive location. The region’s strong economic hubs, reliable transport links, and a steady demand for high-quality developments mean that this is still a great time to invest in a new-build home.

We are committed to creating homes that not only meet your needs but also provide long-term value. Keep an eye on our blog for the latest updates on the UK property market and insights into how these trends might impact your property journey – staying informed is crucial in today’s fast-paced market.

NEWS