Key takeaways: May 2025 House Prices
House prices: the average asking price of a home hits a new record, at just below £380,000
Number of homes for sale at this time of year remains at a decade-high
After a busy March, new home-buyer demand slowed to +4% compared to last year, with new sellers coming to market up by +14%
The much-anticipated second Bank Rate cut of the year could spur on further mortgage rate reductions from lenders
The Spring housing market is typically one of the busiest periods for home-movers, and we’ve seen new house price records in May every year since 2020.
Prices have hit another new record this May, jumping by 0.6% (+£2,335) to £379,517. However, this is the smallest increase in asking prices for homes coming on to the market that we’ve seen at this time of year since 2016.
Our property expert, Colleen Babcock, says: “It’s another new price record this month, but having seen a May price record for the last five years, it appears to be driven more by seasonal factors given that new buyer demand has slowed.”
UK House Prices: May 2025
Month
Avg asking price
Monthly change
Annual change
May 2025
£379,517
+0.6%
+1.2%
April 2025
£377,182
+1.4%
+1.3%
You can check the average prices in every region by viewing our House Price Index report for May and also the latest sold prices in your area here.
Dip in new buyer demand after stamp duty increase
Although asking prices have hit another new record in May, the number of homes available for sale is at a decade-high, so there’s more choice for would-be home-buyers, which has limited price growth.
After the busier-than-usual March, when buyers in England and Northern Ireland rushed to beat the stamp duty deadline, demand from buyers dropped by 4% in April compared to a year ago – the first time this year that buyer demand has fallen below last year’s levels.
Despite this, demand so far this year is still 3% ahead of last year, and there are signs of a bounceback in May. The number of sales being agreed still running 5% higher than at this time last year, indicating that spoiled-for-choice buyers are still being tempted by the right property at the right price.
New properties coming to market remains at decade-high
The number of new properties coming to market is now 14% ahead of this time last year, creating a decade-high level of choice for buyers.
With new seller activity currently outpacing new buyer activity, sellers are having to work harder to secure buyers. This shift towards a more balanced market is good news for buyers but means sellers need to be more realistic about their pricing expectations to achieve a sale.
Colleen says: “In the current market, buyers may well have several similar homes to choose from in their area, and a home which appears over-priced compared to the competition may not get a second look. This month’s price increase being the lowest in May for nine years is a sign of a market that favours buyers.”
What’s happening with mortgage rates?
Mortgage interest rates are lower than they were at this time last year, and the much-anticipated second Bank Rate cut of the year could spur on further mortgage rate reductions from lenders.
The lowest available two-year fixed mortgage rate is now 3.72%, down from 4.75% at this time last year. This improvement, combined with average earnings growth that continues to outpace house price growth, should help support buyer activity as the year progresses.
Colleen says: “While we’re not expecting drastic reductions, any lowering of rates will be a boost to buyer sentiment and affordability. With a high number of sellers and a small dip in buyer demand, it’s worth reminding people out there thinking of coming to market that they need to work hard to attract buyer attention. Working with your estate agent to understand your local market and coming to market with a tempting price will give you the best chance of standing out.”
Take a look at the current UK mortgage rates. A good way to find out how much you could borrow is to use a Mortgage Calculator. And to get a personalised result by applying for a Mortgage in Principle which will take you one step closer to a mortgage offer.
You can also check the current average Remortgage Rates here, and explore options with our Remortgage Calculator.
The header image for this article is provided by Hudson Moody, York City Centre.
