UK house prices rose for a second consecutive quarter in 2025, underlining the housing market’s ability to withstand continued pressure from high borrowing costs, according to the latest Property Market Index Review from Benham and Reeves.
The index, which combines data from Halifax, Nationwide, Rightmove and the UK House Price Index, found that the average UK property price reached £305,680 in Q2, up 0.7% on the previous quarter and 2.3% higher than a year earlier.
It marks the second quarter of positive growth this year and follows four consecutive quarterly rises in 2024.
In London, prices climbed 0.9% to £593,620, also marking a second successive quarter of gains. Analysts say the figures reflect a steady rebound in confidence, with mortgage approvals remaining above 60,000 per month for more than a year, even as higher rates continue to limit affordability.
GROWING DISCONNECT
However, the data also highlight a growing disconnect between buyers and sellers. The gap between the average mortgage-approved price (£284,307) and average asking price (£378,312) stood at 33.1% in Q2 — the widest since mid-2024. Across the UK, sold prices averaged £265,560, almost 30% below asking prices, suggesting many vendors are still slow to adjust to new market realities.
Marc von Grundherr (main picture, inset), director of Benham and Reeves, said the housing market had “demonstrated a great degree of resilience” in 2025, with prices “climbing at a slow but consistent rate” despite wider economic turbulence.
“Buyers have returned en masse, but they remain restricted by higher interest rates, which are impacting affordability and the price they are willing to commit to when purchasing,” he said.
“Sellers are sitting stubbornly firm when it comes to their asking price expectations, but those securing sales are the ones taking a pragmatic approach to current conditions and adjusting accordingly.”
Von Grundherr added that the widening gap between asking and sold prices “demonstrates that buyer appetites remain healthy, as long as the property you are selling is within financial reach.”
