UK Housing Market & Finance Update: Summer 2025 Trends, Insights & Opportunities
As the UK housing market heats up this summer, both buyers and sellers are navigating record highs, affordability shifts, and evolving insurance and lending trends. Here's a comprehensive roundup of the latest developments, based on expert research and analysis.
Record Property Prices, Rising Costs & Better Access for First-Time Buyers
Record Asking Prices
According to Rightmove, the average asking price of a home in the UK reached just under £380,000 in May 2025. While this marks a new high, the growth rate is slowing, and many analysts now describe the landscape as a buyers’ market.
Cost of Moving Up 13%
The average cost of moving home in the UK has surged by 13% in the past year (Yopa, 2025). In England, changes to Stamp Duty Land Tax (SDLT) from April 1 have played a key role. Current estimated moving costs:
Source: Data analysed by Yopa.co.uk (2025)
Affordability for First-Time Buyers Improving
Despite rising property values, first-time buyer affordability is at a 10-year high (Yopa, 2025), helped by wage growth, stabilising prices, and more accessible mortgage products.
Low & No Deposit Mortgages on the Rise
Lenders are increasingly catering to new buyers with limited savings. The number of low-deposit mortgage products is at a 17-year high (Yopa, 2025). Additionally, 100% mortgages have cautiously returned, reflecting greater flexibility in the lending market.
The Bank of Mum and Dad Still Supports Homeownership
According to Savills, more than 50% of first-time buyers received family support last year—amounting to £9.6bn in gifts and loans, with an average contribution of £55,572.
Although this trend continues, falling mortgage rates and relaxed stress tests could reduce reliance on family support going forward.
Home Insurance Premiums Climb Amid Weather & Construction Costs
Home insurance premiums rose by 8.5% in Q4 2024 (ABI, 2025), with an average annual policy now costing £231 (Go.Compare, 2025). Key regional differences include:
Greater London: £336
Scotland: £228
North East: £190
Extreme weather and higher rebuild costs contributed to £886m in claims in Q1 2025—a 20% increase over the previous year.
Tip: You can cut costs by shopping around, avoiding unnecessary add-ons, and paying annually.
⚠️Avoid leaving a spare key where it can be easily found—most insurance policies only cover theft where there are signs of forced entry.
Dressing Rooms: The Latest Home Value Booster?
Inspired by celebrities and lifestyle influencers, dressing rooms are becoming highly desirable features—potentially adding up to £40,000 to property values (Benham and Reeves, 2025).
While converting a bedroom may seem counterintuitive, today’s buyers are prioritising layout and luxury over sheer bedroom count.
Over-65s Hold £2.9 Trillion in Property Wealth
Recent research shows over 10 million UK residents aged 65+ own their homes outright, with a collective property wealth of £2.9 trillion (Key, 2025).
Releasing equity may offer a more comfortable retirement or help younger family members with deposits—though it’s essential to seek specialist advice first.
Home Sales Taking Longer Than Expected
Buyers now expect to exchange contracts in 88 days, but the UK average is 124 days—a 41% increase (OPDA, 2025). Experts call for digital transformation to streamline the buying process.
Mortgage Overpayments Could Save Homeowners Billions
Research shows UK homeowners could save £2.3bn annually by making overpayments—but many don’t understand the benefits.
Most lenders allow 10% overpayment annually without penalties.
Even £50/month extra could save nearly £7,000 in interest and shorten a mortgage by nearly two years (based on an average £195,000 mortgage/ unspecified term).
With some mortgages now lasting up to 40 years, 69% of first-time buyers are keen to reduce their debt, term or interest. Although overpayments could help them achieve this goal, it’s important to consider other financial commitments. We can help assess whether overpayments are right for your situation.
Take a look at how overpaying could impact your mortgage with our Overpayments Calculator >
Life Insurance: Joint vs Dual vs Individual Policies
While 40% of life insurance policies in the UK are joint (Money Expert, 2025), they may not offer the flexibility some households need—especially in the event of a relationship breakdown.
Dual policies provide:
Two separate covers in one application
Two potential payouts
Greater flexibility and continuity
Choosing the right policy depends on your unique needs. We can help guide you.
Second Homes Market Cools: Opportunity for Local Buyers?
New Council Tax rules are prompting second home owners to sell, particularly in tourist hotspots. Some councils are charging up to 100% extra tax on homes not used as a main residence.
Listings in coastal areas like Bournemouth and Torquay are up 40%. (Zoopla, 2025)
More stock = more opportunities for local buyers.
Buyers should assess long-term suitability of former holiday lets.
Mortgages for Gig Workers: Overcoming the Challenges
Variable income streams. Multiple employers. Seasonal side hustles. This is business as usual for gig economy workers, freelancers and contractors, but for some lenders these factors could be looked at in such a way as to make getting a mortgage more difficult:
76% of UK gig workers struggle to get approved
74% of gig workers declined despite good credit (Rollee, 2025)
Only 10% succeed on their first attempt
We understand the challenges of variable income and can help present your finances in a way lenders understand.
Need help navigating the 2025 property market? Whether you’re buying your first home, supporting a family member, or remortgaging, we’re here to provide advice tailored to your situation. Book your free intro call with us here >
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
Disclaimer: This blog is for general information only and does not constitute financial advice. Please seek professional guidance before making any decisions. All data correct as of June 2025. FCA does not regulate commercial buy-to-let mortgages.
