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.

Close-up of two businesspeople shaking hands, symbolizing agreement and partnership.

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.

A smiling couple holds a house-shaped key, symbolizing their new home purchase.

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