UK Property Market 2025: An End-of-Year Roundup

As 2025 draws to a close, the UK property market has proven to be one of adjustment rather than collapse shaped by easing inflation, changing interest rate expectations, major legislative reform, and a growing divide between regions.

At Hannells, we’ve spent the year helping buyers, sellers, landlords and tenants navigate a market that has required realism, flexibility and expert local knowledge. Here’s our look back at the key themes that defined the UK property market in 2025 and what they mean heading into 2026.

 

🏠 House Prices in 2025: Slower, Softer, but Stable

After the volatility of previous years, house price growth slowed across much of the UK in 2025.

• Nationally, prices recorded modest annual growth of around 1–2%, with momentum tailing off in the second half of the year.
• London underperformed, with prices falling year-on-year — particularly flats — as affordability pressures, taxation changes and investor caution weighed on demand.
• In contrast, many Midlands and Northern regions continued to show resilience, underpinned by stronger affordability and steady buyer demand.

At Hannells, we saw well-priced homes still achieving strong interest, while over-ambitious pricing led to longer selling times — reinforcing the importance of accurate valuation in today’s market.

 

📉 Market Activity: A Year of Cautious Confidence

Buyer activity in 2025 was best described as selective rather than subdued.

• Mortgage approvals gradually improved as lenders became more flexible, and wage growth helped offset borrowing costs.
• However, confidence dipped following the Autumn Budget, with surveyors reporting fewer new buyer enquiries late in the year.
• Sellers increasingly adjusted expectations, leading to more realistic asking prices and smoother transactions where advice was followed.

From our perspective, transactions didn’t disappear, they became more considered. Buyers took longer, asked more questions, and relied more heavily on professional guidance.

 

🏡 First-Time Buyers: Still Under Pressure, But Moving

First-time buyers remained central to market activity in 2025.

• The average first-time buyer mortgage reached record levels, reflecting higher prices and larger borrowing.
• Family support — the so-called Bank of Mum and Dad — continued to play a major role.
• Encouragingly, improving mortgage products and stabilising rates helped many renters make the leap into home ownership.

At Hannells, supporting first-time buyers through this process — from affordability discussions to negotiating the right deal — remained a key focus.

 

🏛️ A Landmark Year for the Rental Market

One of the most significant developments of 2025 was the passing of the Renters’ Rights Act, representing the biggest shake-up of the private rented sector in decades.

Key changes include:

• The abolition of Section 21 “no-fault” evictions
• Stronger tenant protections
• New minimum property standards
• Restrictions on advance rent and rental bidding

While full implementation begins in 2026, 2025 was a year of preparation. Many landlords reassessed portfolios, reviewed compliance, and sought professional advice — something Hannells has been actively supporting through our letting’s teams.

 

🌟 A Standout Year for Hannells

Against this complex backdrop, 2025 was also a year of major achievement for Hannells.

We were incredibly proud to be crowned Best Overall Estate Agent in the UK at the 2025 allAgents Awards — an honour based entirely on verified customer reviews.

In addition, Hannells was recognised as:

• Best Medium Chain Estate Agent in the UK
• A top-rated agent nationally for customer service and satisfaction

These awards reflect what matters most to us: delivering outstanding service, expert advice, and real results for our clients, regardless of market conditions.

 

📊 Local Insight: What We Saw on the Ground

From our offices across Derby and the surrounding areas, we observed:

• Consistent demand for family homes in popular suburbs
• Strong interest in well-presented, energy-efficient properties
• Buyers prioritising value, location and long-term affordability
• Sellers achieving excellent results when pricing and presentation were right

Despite headlines about market uncertainty, local markets continued to move, especially where agents truly understood their patch.

 

🔮 Looking Ahead to 2026

As we move into 2026, the outlook is cautiously optimistic, with the Bank-of-England cutting the base rate in December, a New Year boost for the property market could be on the cards.

• Interest rates are expected to ease further
• Buyer confidence is likely to improve
• House price growth is forecast to remain modest but positive
• Activity should gradually increase as affordability improves

For buyers and sellers alike, the fundamentals remain the same: good property, realistic pricing, and expert representation make all the difference.

 

🧠 Final Thoughts from Hannells

2025 reminded us that property markets don’t stand still, they evolve.

While it wasn’t a year of runaway growth, it was a year that rewarded:
✔ Sensible decision-making
✔ Strong local knowledge
✔ Professional advice
✔ And trust between agents and clients

As we head into 2026, Hannells remains committed to guiding our customers with clarity, confidence and care, whatever the market brings.

Thinking of moving in 2026?

Book your free, no-obligation valuation with your local Hannells team today.

✨ If you would like tailored advice about buying, selling or investing locally, get in touch with your nearest Hannells branch or arrange a free, no-obligation property valuation today.

Click HERE to book your free, no-obligation valuation.

Get in touch with your local branch of Hannells by clicking HERE

To catch all of our latest content, make sure you subscribe to our social media channels below!

Facebook: Facebook.com/Hannells

Instagram: Instagram/HannellsEstateAgents

Youtube: Hannells on Youtube

LinkedIn: linkedin.com/company/hannells-estate-agents

Hannells – A Moving Experience…