New mortgage affordability guidelines assist UK housing market keep away from summer season lull | Housing market

[ad_1] The standard summer season lull in Britain’s housing market has been averted amid the supply of larger dwelling loans fuelling a “purchaser’s market”, in line with a property web site.

Regardless of the indicators of a bustling market, Zoopla stated it had halved its home worth forecast for 2025 as patrons had been bearing in mind elevated stamp obligation prices of their gives in England and Northern Eire.

The file variety of properties on the market was protecting worth rises in test, it stated, with the common UK home worth in June sitting at £268,400, up £3,350 (1.3%) from a yr earlier.

Richard Donnell, the chief director of the analysis and perception crew at Zoopla, described the housing market as being “broadly in steadiness” with the circulate of recent properties matching the urge for food of home hunters.

“We’re seeing wholesome ranges of demand and gross sales, however this isn’t sparking quicker worth inflation. In actual fact, extra properties on the market, significantly throughout southern England, is re-enforcing a purchaser’s market, protecting worth rises in test.”

Whereas market exercise normally slows through the summer season, this isn't occurring this yr. Purchaser numbers in July are 11% larger than in the identical month of 2024, leading to an 8% improve in gross sales being agreed.

Earlier this yr property specialists had reported a dampening impact on home worth progress after the top of a stamp obligation vacation in England and Northern Eire on 31 March. Nonetheless, current government-backed modifications to the best way lenders assess mortgage affordability have served as a catalyst for elevated exercise, Zoopla stated. Homebuyers utilizing a mortgage can now borrow as much as 20% greater than they might as lately as three months in the past.

With mortgage charges “holding regular”, Donnell stated: “Much less stringent affordability testing has boosted shopping for energy.”

Firstly of the yr Zoopla predicted home costs would rise 2% in 2025, but it surely has minimize this to 1%. Whereas the index confirmed the annual fee of worth inflation slowed to 1.3% in June, the report pointed to stark regional variations.

Whereas home costs in Scotland, Wales and northern England are experiencing quicker progress – sometimes of 2-3% yearly – costs are rising at a a lot slower fee within the south. Costs have risen by 0.2% within the south-east and London and by 0.3% within the south-west.

The determine for the capital is pulled down by declines in some areas, together with a fall of 1.5% in west London. Elsewhere in England, Truro, Torquay and Exeter registered a number of the greatest declines, down 1.3%, 1.2% and 1.1% respectively.

“Higher provide of properties on the market and mortgage charges remaining larger than anticipated are the important thing causes for weaker progress,” Donnell stated.

New figures from Rightmove confirmed common asking rents throughout Britain, excluding London,rose 1.2% to a brand new file of £1,365 per 30 days within the second quarter of 2025. The typical marketed fee within the capital additionally reached a brand new excessive of £2,712, up 0.5% over the quarter.

The property web site’s report stated the common month-to-month hire paid by new tenants was £417 greater than in 2020. That is an uplift of 44%, outpacing a 36% rise in common earnings over the identical interval.

Nonetheless, a lot of this progress occurred on the peak of the Covid pandemic. Since 2023, yearly hire rises have regularly slowed as provide and demand rebalanced. The variety of accessible properties is now 15% larger than this time final yr. Nonetheless, it's nonetheless 29% under 2019’s degree.

The much less frenzied market means landlords are taking longer to search out tenants, in some instances resulting in hire reductions. Almost 1 / 4 (24%) of asking rents had been minimize throughout advertising, the best quantity since 2017.

Rightmove’s property knowledgeable Colleen Babcock stated regardless of rising asking rents, the “large image is that yearly hire will increase proceed to gradual”. “Provide and demand is slowly rebalancing in the direction of extra regular ranges, although we nonetheless have a option to go earlier than we attain pre-2020 ranges,” she added.