July 2025 Housing Market Overview
- Thowsif Mukit
- Jul 27
- 4 min read
The housing market in July 2025 sits at an interesting crossroads. After two years of rapid adjustment, conditions have steadied. Buyers and sellers are still active, but confidence is subdued. The pace of price growth has slowed across most regions, with data from the Office for National Statistics (ONS) showing average UK house prices broadly flat compared to the same period last year. Behind that stability lies a shift in behaviour where people are making fewer speculative purchases and more long-term, needs-based decisions.
Mortgage rates remain the key influence on activity. The Bank of England’s Money and Credit report for June shows that new mortgage lending is below historic norms, reflecting the continued caution of both banks and borrowers. Fixed-rate deals remain in the mid-5% range, and affordability checks remain tight. This has cooled demand, particularly in high-value regions where household incomes simply cannot stretch further.
Housing Market
The latest ONS Private Rent and House Prices bulletin confirms that prices have stabilised nationally, but with strong regional contrasts. Markets in the North and Midlands continue to show modest growth, supported by better affordability and strong local demand. In contrast, the South and parts of London are seeing small declines as higher interest costs continue to bite.
Mortgage activity remains restrained. The Bank of England’s June 2025 Money and Credit data shows that the number of mortgage approvals for house purchases has hovered just below 60,000 which is well under the long-term average. Buyers are taking longer to commit, and lenders are requiring larger deposits to offset risk. Many households are opting to remortgage rather than move, preferring stability over expansion.
The rental market, however, is still running hot. Demand for rental properties remains high, driven by affordability pressures that have kept potential first-time buyers on the sidelines. The ONS reports continued rental price growth across all UK regions, adding pressure to tenants even as landlords face tighter margins due to higher mortgage costs and reduced tax relief.
Construction activity has been steady but unspectacular. Builders have continued to grapple with rising material and labour costs, which has slowed the pace of new developments. The GOV.UK House Price Index summary for June 2025 notes that housing supply remains constrained, helping to underpin prices despite weak demand. The overall picture is one of stability as the market finds its balance in a higher-rate environment.
How it impacts you
For homeowners, the biggest challenge remains mortgage affordability. Those coming to the end of fixed-rate deals this summer are facing noticeable jumps in monthly payments. Refinancing at higher rates has become the norm, and the reality is that many households are having to adjust budgets to accommodate the increase.
For landlords, the story is one of tightening margins. Higher borrowing costs and stricter lending criteria have made expansion more difficult. Many are focusing on efficiency by improving existing properties rather than buying more and re-evaluating their portfolio structures to manage tax exposure more effectively.
Small business owners who use property as collateral also face a more cautious lending climate. The cost of finance is higher, and lenders are placing greater emphasis on cashflow projections and risk management. For those considering property purchases or refinancing commercial premises, this environment calls for more strategic planning and realistic forecasting.
Despite the challenges, stability in prices offers reassurance that the market is not in decline. For buyers, this means less fear of falling values; for investors, it means reliable long-term returns once rates begin to normalise. The key is preparation where buyers should be aligning borrowing, investment, and budgeting decisions with realistic expectations.
What you can do
Navigating the housing market in 2025 is less about timing the market and more about financial readiness. Homeowners should begin reviewing mortgage options several months before their current deal expires. Even small differences in rates can amount to thousands of pounds in annual costs, so locking in early can make a meaningful difference.
Those planning to buy should approach affordability with realism. Stress-testing mortgage offers at current rates and not historic lows. This ensures that repayments remain manageable if conditions stay tight into 2026. Taking time to strengthen credit profiles and build larger deposits will also improve access to better deals.
For landlords, this is a good moment to reassess property ownership structures. Incorporation, refinancing, or better expense management can help offset the impact of higher interest costs and lower tax relief. Ensuring that rent reviews and expense tracking are up to date can further protect profitability.
Businesses with property assets should plan ahead for renewals and refinances. High borrowing costs can affect both capital investment and working capital, so clear financial forecasting is essential. Proactively managing loan-to-value ratios and engaging lenders early will help maintain flexibility if rates start to fall later in the year.
At Ledgr Accountants, we help clients interpret these housing and finance trends through a practical lens by providing clarity on cashflow, tax planning, and investment strategy so that property decisions feel steady, not stressful.
Thowsif Mukit
Commercial Manager
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