If you’re even the slightest bit interested in the economy or the UK housing market, you’ve almost certainly seen the latest news headlines for house prices:
‘House Prices Down!’, ‘House Prices Fall for the First Time in a Decade’, or ‘UK House Price Index Falls Short.’
Such incendiary headlines certainly seem to sound alarm bells about the current health of the UK housing market, but do they tell the whole story?
A closer look at the broader history of the market, along with a closer inspection of regional differences and the context of these price decreases, suggests that the property industry is actually healthier than you are being led to believe.
According to HM Land Registry (1), April data shows that on average, house prices have fallen by 2.8% since March 2025.
While this represents one of the steepest declines in house prices for the past four years, it should be noted that there has still been an annual increase of 3.5% year-on-year.
This makes the average house price in the UK £265,000 as of April 2025.
Despite the alarm apparent in some news sources, it doesn’t appear that the UK property market is struggling.
While both national and international pressures have contributed to buyer confidence in recent years, demand for property, house prices and property transactions have all proven to be relatively robust – even outpacing earlier pessimistic predictions.
For example, in October 2024, the Office for Budget Responsibility (OBR) said, “In our central forecast, we expect house price growth to fall back slightly from 1.7 per cent in 2024 to 1.1 per cent in 2025, as the average effective mortgage rate continues to rise.” (2)
With year-on-year house price increases at 3.5% and mortgage grades gradually lowering (if slowly) over the past months, it’s clear that the impact of April’s house price drop has been somewhat exaggerated.
A number of developments have impacted house prices across the UK in recent years. Arguably, the most impactful of these in recent months has been the influence of the incoming Labour government.
Since taking power in July 2024, the Labour government has moved quickly to introduce a raft of new housing legislation.
The first of these to come into effect was an immediate increase in Stamp Duty for additional properties, such as buy-to-let investments and second homes.
In the short term, this led to investors having to act quickly to reevaluate their investment plans to factor in the additional costs.
Over the longer term, the increased cost of acquiring additional properties has put pressure on house prices as buyers consider the returns on their investments.
Secondly, there was the end of lower stamp duty thresholds for first-time buyers. Thresholds introduced by the previous Conservative government removed stamp duty for homes valued up to £250,000, or £425,000 for first-time buyers.
This was set to return to previous levels in March 2025 (zero rate stamp duty for properties up to £125,000 or £300,000 for first-time buyers), and with no commitment from Labour to extend the lower threshold, the result was a rush of buyers seeking to complete their purchases before the new ‘stamp duty deadline.’
After March 2025, buyer activity naturally slowed as the threshold deadline passed and new buyers considered the higher rate of tax they would need to pay when buying a new home.
Although property demand has remained high throughout 2025, we have seen elevated levels of caution from buyers who are determined to ensure that they are making the right decision when buying property.
The Renter’s Rights Bill is currently just one vote away from becoming law. The Bill will introduce a number of significant changes to existing legislation, including the abolishment of section 21 evictions, amended rules relating to grounds for possession, and protections for tenants from unfair rent increases.
The bill will also apply ‘Awaab’s Law’ and the Decent Homes Standard to the private rented sector.
Although these changes are intended to make the rental market fairer for both tenants and landlords, many property owners have opted to exit the market ahead of the incoming changes.
This has been further fuelled by the proposed changes to EPC regulations, which are expected to arrive in 2025 and would require all rental homes to be EPC Grade C rated by 2030.
As a result, housing stock has boomed across the UK, adding further pressure to house prices as buyers have far greater choice and vendors face increased competition in finding a buyer.
Aside from giving a limited ‘snapshot’ of the housing market based on monthly trends, headlines noting a fall in house prices during April 2025 also fail to take into account the importance of regional variations in determining the overall picture.
According to the Land Registry UK House Price Index, although house prices have fallen between March and April across the UK and for the North West specifically, it should be noted that for the UK, house prices were up 3.52% year-on-year as of April 2025, while house prices in the North West were up by 5.1% for the same period. (3)
It should also be noted that reporting from the UK House Price Index summary: April 2025 shows that most regions of England (barring London) saw a monthly drop in house prices, NONE of them returned an annual drop.
The long-term picture of house prices across the UK is one of gradual growth, rather than one of decline.
While house price is one indicator of the health of the housing market, it certainly isn’t the only one.
Factors such as stock availability, property transactions and the number of buyer enquiries received by estate agents can all provide valuable insights into the current demand for homes.
Data from the Royal Institution of Chartered Surveyors (RICS) shows that of its surveyed representatives, respondents reported a +40% Net Balance* for new Buyer Enquiries during the past month (May 2025) and a Net Balance of circa +20% over the past three months. (4)
The region also posted consistent positive Net Balances for New Vendor Instructions and Regional Newly Agreed Sales during the same period.
With so many factors going in its favour, the North West is currently a thriving hotbed for the property market.
*Net balance = Proportion of respondents reporting a rise in prices minus those reporting a fall (if 30% reported a rise and 5% reported a fall, the net balance will be 25%). The net balance measures breadth (how widespread, e.g. price falls or rises are on balance), rather than depth (the magnitude of e.g. price falls or rises). Net balance data is opinion-based; it does not quantify actual changes in an underlying variable.
Edward Mellor has been helping clients to buy and sell property across the North West of England for the past 40 years.
Whether you are buying your first home, selling as part of an onward move or looking for your next buy-to-let opportunity, we offer fully integrated financial services, conveyancing, and surveying businesses from under one roof.
We are also one of the North West’s most successful auction houses.
To speak to us about any of our in-house services, simply contact us at the appropriate branch using the link below.
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