House price growth across the UK is continuing to slow amid economic uncertainty and seasonal factors, but property sales are forecast to rise over the coming year, according to new figures from Zoopla.
The property website reported that house prices increased by 1.6% in the year to March 2025, easing back from 1.9% annual growth recorded in December 2024. The average price of a home now stands at £268,000, marking a £4,270 rise over the past twelve months.
Zoopla’s latest report highlights a shift in market dynamics, with the number of homes listed for sale rising faster than buyer demand. On average, estate agents now have 34 homes for sale per branch, compared with 31 this time last year, helping to keep a lid on price rises.
“The weakening in buyer demand is partly seasonal, reflecting the Easter holidays, while global events and uncertainty over the economic impact of tariffs are likely to be causing hesitation amongst some buyers,” the report explained.
Despite the cooling momentum, the number of sales agreed is holding up well and is even higher than a year ago, Zoopla noted. Changes made by some lenders to their mortgage affordability assessments are expected to offer a further boost to the market.
Several lenders have recently adjusted the stress rates they apply when calculating mortgage affordability. Stress tests are designed to ensure borrowers could cope if interest rates rise. These adjustments could make it easier for more people to access home loans and increase the amount they are able to borrow.
The Financial Conduct Authority (FCA) is also reviewing its mortgage lending rules, as part of wider efforts to streamline regulations, which could further open up opportunities for buyers.
Encouragingly for prospective buyers, expectations for lower interest rates in 2025 are predicted to keep mortgage rates stable or even slightly lower. Reflecting this trend, HSBC UK on Monday announced a fresh round of mortgage rate cuts, with reductions of up to 0.24 percentage points.
Among the new offerings, HSBC’s Premier customers can now access mortgage rates as low as 3.88%. For non-Premier customers, a two-year fixed home buyer deal is available at 3.91% for those with a 40% deposit, subject to a £999 arrangement fee.
Richard Donnell, executive director at Zoopla, said:
“While house price growth is expected to slow further, towards one to 1.5%, we’re still on course for a 5% uplift in sales volumes in 2025, assuming sellers remain pragmatic on pricing. Regions where affordability is better aligned to local incomes, particularly across the North and Midlands, are set to lead this recovery.
“One of the biggest supporters of continued market activity lies with mortgage lenders. Revisions to how lenders are assessing mortgage affordability will unlock additional buying power and support sales volumes to help tackle the healthy stock of homes for sale.”
Martin Fishwick, senior partner at Jordan Fishwick estate agents in the North West, added:
“After an extraordinary March where many buyers were keen to complete purchases before stamp duty increases, the market has inevitably calmed somewhat in the North West. However, there remains momentum from buyers, driven by rising rents and more attractive mortgage rates.”
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The data from Zoopla coincided with figures released by property portal Rightmove, which revealed that average asking rents outside London hit a record high of £1,349 per month in the first quarter of 2025. In London, the figure rose to an unprecedented £2,698 per month.
While rental demand has cooled slightly, with an average of 12 enquiries per property compared to 16 a year ago, it remains more than double pre-pandemic levels.
However, affordability pressures are mounting. Rightmove reported that a quarter of rental properties are now seeing advertised rent reductions, the highest proportion at this time of year since 2018.
Colleen Babcock, property expert at Rightmove, said:
“On the whole, the balance between supply and demand is improving. This is having a knock-on effect on rental prices, with rents increasing more slowly and more landlords reducing their advertised price.”
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