Welcome to our latest market update, where we round up what’s happening in the UK housing market and take a look at what’s on the horizon for the remainder of 2025. Whether you’re a homeowner, investor, or first-time buyer, this property news update will help you stay informed and make smart decisions.
Base Rate Holds Steady
In its most recent meeting, the Bank of England’s Monetary Policy Committee opted to keep the base interest rate unchanged at 4.5%. Governor Andrew Bailey stated that while the outlook remains cautious, he expects interest rates in the UK to continue on a “gradually declining path”. This decision provides a sense of stability to the wider property market as we head further into the year.
Positive Developments in the Mortgage Market
Although the base rate remained static, the mortgage market showed signs of renewed competition. Many lenders responded by lowering their rates, with some mortgage deals dipping below 4% for buyers with a 60% loan-to-value (LTV) ratio. This marked the biggest monthly drop in interest rates seen in recent months.
However, buyers are advised to be diligent and read the small print. For example, one lender’s headline 3.99% offer came with a hefty arrangement fee of nearly £2,000—approximately £1,500 more than similar mortgage products.
Speed is also of the essence. According to recent data, the average lifespan of a mortgage deal dropped to just 16 days in March, compared to 36 days in February—highlighting the importance of acting quickly when a good deal surfaces.
Residential Property Value on the Rise
New figures from Savills offered further encouragement. They revealed that the total value of the UK residential property market increased by £22.3 billion last year, reaching a total of £379 billion. This represents a 6.3% rise and underlines the strength and stability of bricks and mortar as a long-term investment.
Lucian Cook, Head of Residential Research at Savills, credited this growth to increased mortgage market stability and predicted continued momentum through 2025. He also noted that expected interest rate cuts later this year could widen the pool of active buyers and increase overall spending power.
First-Time Buyers on the Rise
Further insights from the Savills report showed a notable increase in the use of mortgage borrowing to purchase homes—up by £24.3 billion in 2024. This shift is largely driven by first-time buyers, who are showing strong appetite despite higher house prices and borrowing costs.
Conversely, the volume of cash buyers declined, with spending down £8.4 billion. According to Cook, this change demonstrates the enduring ambition among Britons to get on the property ladder. Those who can raise a deposit continue to push forward, undeterred by market challenges.
What This Means for Sellers
This market update offers several takeaways for property owners considering a move. With greater mortgage affordability and growing buyer demand—particularly among first-time buyers—now could be an opportune moment to list your home.
If you’re considering selling and want to know what your property is worth, contact us today to arrange a free, no-obligation valuation. Our experienced team can provide advice tailored to your circumstances and help you take full advantage of current property market trends.
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