UK Housing Market Update – June 2025
June saw the UK housing market balancing cautious optimism with structural challenges. Government pledges of record social and affordable housing funding, a new National Housing Bank, and planning system reforms offer hope against long-term undersupply. However, planning permissions have hit record lows, Section 106 delays persist, and housebuilders face margin pressures.
Government policy boosts:
The Chancellor’s Spending Review unveiled a £39bn commitment for affordable and social housing over the next decade, the largest in 50 years, with an additional £10bn for financial investments via Homes England. This has been widely welcomed by the sector, with the National Housing Federation noting it will “kickstart a generational boost” in social home delivery.
The Government also launched a National Housing Bank under Homes England, aiming to unlock £53bn of private investment to deliver over 500,000 new homes while supporting the Affordable Homes Programme. Alongside, a new AI tool, Extract, was launched to digitise planning records in minutes, aiming to speed up the planning process.
The MHCLG also announced a streamlined planning appeals process, encouraging “submit once, submit right” to accelerate decisions, while the Construction Skills Mission Board launched initiatives to recruit 100,000 extra construction workers annually, supported by £625m in new skills funding.
Market resilience despite affordability pressures
The housing market remained resilient, though affordability pressures persist:
- Halifax reported a -0.4% monthly fall with annual growth slowing to 2.5%, while Nationwide saw a 0.5% rise, with annual growth at 3.5%.
- The average property price is now £296,648 (Halifax) and £273,427 (Nationwide).
- Rightmove’s June index reported a -0.3% dip in asking prices, reflecting sellers adjusting expectations amid competitive conditions.
- ONS data for April showed a -2.7% monthly fall with annual prices up 3.5% to £265,000.
Affordability remains stretched, with first-time buyers now borrowing on 31-year mortgage terms to manage higher rates, and rural areas continue to outpace urban price growth.
Construction output and industry performance
The S&P Global UK Construction PMI reported a slowing decline in May (47.9), but housebuilding remained the weakest segment (45.1). ONS data showed construction output rose 0.9% in April, the third consecutive month of growth, driven by infrastructure and commercial sectors.
In the industry:
- Crest Nicholson returned to profit (£9.4m pre-tax for H1), while Bellway reported strong spring demand with up to 8,700 completions expected this year.
- Gleeson Homes issued a profit warning (15-20% below expectations) due to flat prices and rising build costs.
- The Competition and Markets Authority extended its investigation into anti-competitive practices by seven major developers.
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