July 2025 Property Market Update

UK house prices fell by 0.8% in June, marking the biggest monthly drop since February 2023, according to Nationwide. The fall is likely due to weaker demand following April’s stamp duty changes. Despite the monthly decline, prices remain 2.1% higher than a year ago, although this marks the slowest annual growth in nearly a year, likely reflecting the recent impact of stamp duty changes. Nationwide expects market activity to improve, supported by low unemployment, real wage growth, and the potential for interest rate cuts. The stamp duty threshold changes continue to disrupt the market, with a rush to complete deals before April and a slowdown after.

Experts believe the impact of these changes is temporary, and early signs of recovery are visible through rising mortgage approvals. While first-time buyers still struggle with high rents and deposit challenges, the market may stabilise as buyers adjust to the new normal.

Rightmove have just released their Q2 rental report which shows that rents outside London reached a record high of £1,365pcm in Q2, up 3.9% on the same time last year. Over five years, average rents have now risen by 44%, while earnings have grown 36%, making affordability worse for tenants overall. There are positive signs for supply and demand: rental stock is up 15% year-on-year, while tenant demand has dropped 10%.

Although rents are still rising, the pace has slowed amid softening demand and increased stock. This growing price sensitivity means landlords may need to adjust expectations and act quickly to avoid extended void periods. Longer letting times reflect this trend, with it now taking 25 days on average to agree a let. This is up from 21 days last year and 18 during the post-pandemic peak. With average letting times now approaching a month, minimising voids through competitive pricing and swift action is increasingly important. Price reductions are also on the rise, with 24% of listings being reduced, the highest level since 2017.

Now is the time to review your strategy. With more choice in the market, the right pricing and marketing from the outset is key. If you’d like expert advice on maximising your rental income and avoiding costly voids, speak to our lettings team today.