Market Update - May 2025

After a positive start to the year in January and February, the recently emerging trade wars have taken much of the ‘spring’ out of the step of the UK’s Spring property market. Inflation concerns and global economic uncertainty remain. However, landmark trade deals for the UK with the US and India, a thawing of US/China trade relations, and a reduction in interest rates (with possible further rate cuts to come) could see some green shoots emerging once again for the UK’s housing market. We ask our panel of expert property advisors, around the country, for a localised market update and what these latest developments mean for home buyers.

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Prime Central London (PCL)

What is your view of pricing in PCL today?

Camilla Dell, Black Brick:

“In historical terms, it’s looking good value compared to the peak in 2014-15. The market is down by 21% since the peak, and by as much as 40% when taking inflation into account (according to research by Savills). For US buyers and other buyers who are pegged to the US dollar, due to the depreciation of the pound and strengthening of the dollar, these buyers have seen discounts of 37% since the peak. In every sense the market today is very much a buyer’s market. The combination of tax rises and the abolition of the UK Res Non Dom regime has created negative sentiment. Prices are lower. There is more supply. And some sellers are extremely keen sellers. However buyers will need careful advice and guidance to identify the right opportunities.”

Guy Meacock, Prime Purchase: 

“We find that a good proportion of sellers still have outlandish expectations of what price they can achieve. What they perhaps don’t appreciate is that buyers have by and large adopted the more downbeat sentiment of recent weeks, expecting perhaps as much as 20 per cent off the guide. Yet those sellers who bought in London five or ten years ago are still expecting to make their costs back – and then some.”

How do you expect the PCL property market to perform for the remainder of 2025?

Camilla Dell, Black Brick: 

“A mixed bag. PCL will continue to be challenged due to wealthy people leaving. Knight Frank have this week revised their PCL forecasts from 2% growth to 0% for 2025. The reality of course is much more nuanced. We expect PCL to fall in value this year and we think Savills forecast of minus 4% for this year is the more likely outcome. However in outer prime areas more popular with domestic and needs based buyers the outlook is more positive. Demand for 3-4 bedroom homes up to £2m remains fierce and lower interest rates will also support the lower and more domestic rungs of the property ladder this year.”

Guy Meacock, Prime Purchase: 

“The slight malaise we are seeing is likely to perpetuate through the rest of this year, with PCL registering negative growth in prices. That said, the recent trade deals and an interest rate cut, with the expectation of more to come, felt like a lurch from negativity to blind optimism. While we have learnt not to look too far beyond tomorrow, we are dealing with buyers who want to live here and are schools driven, so it’s a pretty healthy market, much more normalised than was the case during the pandemic. It is more balanced and feels a better market to trade and negotiate in, even if it does have its challenges.”

London Buyers

What are your top tips for London buyers right now?

Lucie Hirst, Colombo Hirst:

1. Be prepared and decisive – Quality stock remains limited in Prime Central London, so buyers who are proceed-able and have financing in place will be better positioned to act quickly when the right property is sourced.

2. Focus on long-term value – With short-term volatility still likely, buyers should prioritise location, use, and long-term potential over trying to time the market perfectly.

3. Leverage negotiation opportunities – While competitive bidding is occurring in some sectors of the market, uncertainty in other price brackets means there’s still room to negotiate – particularly for properties that have lingered on the market.

First Time Buyers

What advice would you give First Time Buyers in this market?

Liam Monaghan, LCP/Private Office:  

“We always advise first-time buyers to speak to a recommended mortgage advisor as their first point of call, to ensure they are fully aware of all the finance options available to them and have a clearly defined budget before they commence their search. Getting pre-approved for a mortgage is also a good idea to show sellers they are serious and enable them to move quickly when they find the right home, which are usually in high competition in the first-time buyer market.

Another key consideration for first-time buyers is whether a property / location offers the potential for capital appreciation, to help ‘future-proof’ their investment. First time buyers usually intend to stay in their first home for a minimum of 3-5 years, therefore value growth over time can help them get the most out of their first property purchase, enabling them to move up the ladder in the future.”

Mortgages

What is happening with mortgages at the moment?

Adrian Anderson, Anderson Harris (Mortgage Advisors):

“Interest rates remain relatively high, with the Bank of England base rate still elevated following efforts to control inflation. The bank of England has adopted a cautious approach, emphasising gradual and careful rate adjustments following the quarter point reduction in the Bank of England base rate this month. Fixed mortgage rates have been reducing since the ‘Trump tariff announcements liberation day’ which has been welcomed by mortgage borrowers and the financial markets are pricing in at least two more quarter point reductions in the Bank of England base rate by the end of the year with further reductions next year. 

Most mortgage borrowers are opting for either a 2 or 5 year fixed mortgage rate to provide some budgeting certainty. The reduction in mortgage rates along with certain major lenders like Santander, Halifax and Lloyds lowering their stress test rates will have a positive impact on borrowers mortgage capacity and appetite to borrow.”

Prime Regional Property Markets

How are prime regional markets performing and what are your expectations for the remainder of the year?

Ben Horne, Middleton Advisors: 

“Supply feels to have improved significantly, largely because many potential vendors held off last year. But some prices remain high as aspirational vendors want to achieve pre-Truss prices and this could cause the market to stagnate if selling agents aren’t able to convince vendors of current values. Key advice for buyers is to know your values, advice for sellers is to make sure your price is realistic.

So my prediction is that a good number of properties will sell well, not necessarily at the levels they might have achieved in 21/22 but at a fair price for all. I suspect we will also be left with a good number of unsold properties going into winter having not achieved their guide price”.

The Cotswolds

Craig Fuller, Craig Fuller Property:

“The market has certainly gained traction, with increased confidence among both overseas (USA, UAE, Singapore, Caribbean) and UK buyers. However, it’s important to note that buyers are taking their time, being more diligent, and slower to commit. Despite this, it remains a buyer’s market.

The number of multiple offers on good properties is increasing daily, with the dreaded best and final offers appearing. While there’s been a resurgence of older stock, particularly at higher levels, there’s also a significant increase in the volume and quality of new stock, particularly between £3-4M. However, properties with budgets suitable for traditional “young family moving to the county” are still relatively scarce.”

Home Counties

Kim Hall, Watership Property:

“Currently best in class houses, if properly priced, are selling well and under competitive bidding. For these properties, the market remains resilient. If a house is overpriced, or severely compromised, it will remain unsold.  However, the financial world has settled a little after a pretty volatile and unpredictable few months, plus our sentiment plus that of our clients, is that there will be further interest rate cuts, which will ease potential mortgage/financial burdens. We anticipate this will be reflected in our local markets and confidence and therefore demand will increase, as the year progresses”.

This market brings opportunities for focussed buyers to take advantage of those properties which have a need to be sold and/or are struggling to find a buyer. Good buyers can take advantage of the current dip in demand/slight market nervousness, but we don’t expect this period will last for very long.”

South West

James Law, Stacks:

“After a slower than normal start, partly due to a late Easter but mainly to world events, a surfeit of property has started to come to market. A lot is enthusiastically priced but those more realistically priced properties, especially best in class examples, are starting to go under offer. The prime market, especially property near and over the £2m price is sticking (SDLT is an issue, especially with second home buyers) but more prospective purchasers are appearing, albeit still wary to commit. The likelihood of lowering interest rates and more sensible pricing bodes well for the summer and autumn markets, when good value will be available to those who know what they want and are prepared to drive a hard bargain. Local knowledge and market know-how will definitely prove their worth.”