The usual summer lull in Britain’s housing market has been mitigated amid interest rate cuts and affordability changes. These factors are helping to support bigger home loans fuelling a “buyer’s market”, according to a Zoopla.
The record number of homes for sale was keeping price rises in check, it said, with the average UK house price in June sitting at £268,400, up £3,350 (1.3%) from a year earlier.
Richard Donnell, the Executive Director of the Research and Insight team at Zoopla, described the housing market as being “broadly in balance” with the flow of new properties matching the appetite of house hunters.
“We’re seeing healthy levels of demand and sales, but this isn’t sparking faster price inflation. In fact, more homes for sale, particularly across southern England, is re-enforcing a buyer’s market, keeping price rises in check.”
Buyer numbers in July are 11% higher than in the same month of 2024, resulting in an 8% increase in sales being agreed.
Recent government-backed changes to the way lenders assess mortgage affordability have helped to serve as a catalyst for increased activity. Homebuyers using a mortgage can now borrow up to 20% more than they could as recently as three months ago.
A further supporting factor in the market direction was on the 7 August 2025, when the Bank of England (BoE) announced a reduction in its base rate from 4.25% to 4.00%. This marks the fifth consecutive cut since August 2024, and the BoE’s decision to decrease, following a hold, shows a continued dedication by the UK Monetary Policy Committee to maintain a stable market.
Henry Knight, Managing Director of Springtide Capital Mortgage Brokers comments: “Rates are becoming more competitive. In parallel, mortgage affordability calculators are being revised with reduced variable rates and less stringent stress testing. The direction the market is taking is encouraging. After several years of cautious, more risk-averse appetites from lenders, we are now seeing increased product innovation, more holistic underwriting, and a renewed appetite to lend.”
However, despite the positives, it remains vital to assess thoroughly factors such as regulatory changes, affordability revisions and broader economic uncertainties that could influence future market performance. We are here to help. Our experienced brokers are available today to find the solution that best suits your personal circumstances.
Please contact us on 020 8154 7280
Sources:
Housing market’s summer surge dampened by soaring stamp duty costs – Zoopla
The FCA confirms it will simplify mortgage lending and advice rules | Springtide Capital