UK Housing Market Update - October 2025

The UK housing market in October 2025 continues to show resilience, stability, and a touch of caution. With regional performance diverging and buyers awaiting clarity ahead of the Autumn Budget, the market is neither booming nor falling, it’s holding steady. Here’s a clear breakdown of what’s happening, why, and what it means for homeowners, investors, and property professionals.

1. Market Snapshot

October saw modest but positive momentum across the country:

• Nationwide’s House Price Index reported a 0.3% monthly rise and 2.4% annual growth.

• The average UK home is now estimated at £272,226.

• Rightmove recorded an average new-seller asking price of £371,422, up slightly month-on-month but 0.1% lower year-on-year.

• Rental prices continue to outpace house price growth, with UK private rents increasing by around 5.5% over the year.

Overall: The market is stable, not surging. Buyers are active but cautious, and sellers are increasingly realistic with pricing.

2. Drivers Behind Market Conditions

Budget Uncertainty

With the Autumn Budget set for 26 November, speculation around possible property tax changes has dampened enthusiasm, particularly at the higher end of the market. This has muted what is usually a busy buying period.

Regional Disparities

The UK market remains split:

• London & the South - Experiencing flat or negative growth, with London asking prices down around - 1.4% year-on-year.

• North & Scotland - Holding stronger, with modest positive price increases driven by affordability and solid demand.

Mortgage Rates & Affordability

While rates are still higher than pre-2020 levels, stability in interest rates plus slow home-price growth is giving some buyers breathing room. Increased stock levels are also reducing seller leverage.

Strong Rental Demand

Private rental prices continue rising faster than house prices, maintaining attractive yields for investors, especially in regions with limited rental supply.

3. What This Means for Investors & Property Professionals

Whether you're a buy-to-let investor, an impact-housing operator, or part of a sourcing firm, the current conditions offer both opportunity and leverage:

• Negotiation power has improved, particularly due to increased supply.

• Northern markets offer better yields and are seeing more resilient uplifts.

• Social-impact housing remains underpinned by rising rental demand and government-backed income streams.

• Premium property segments may slow, depending on Budget outcomes - potentially creating buying opportunities for the well-prepared.

4. Key Risks to Monitor

• Fiscal policy changes in the upcoming Autumn Budget.

• Affordability shocks if interest rates fail to ease.

• Regional price corrections in the South if demand weakens further.

• Economic backdrop: slower GDP or wage growth could weigh on sentiment.

5. What to Watch Next

Over the coming months, attention will be on:

• Budget announcements influencing property taxes.

• Mortgage rate trends heading into early 2026.

• Rental growth trajectory, particularly for yield-focused investors.

• Supply levels, especially new-build completions.

• Regional sales volumes, a leading indicator of market direction.

Final Thoughts

October 2025 marks a period of steady, cautious normality in the UK housing market. While not the fast-paced environment of previous years, the current landscape suits strategic investors: those willing to focus on fundamentals like rental demand, affordability, and region-based value.

For investors with an eye on yield, government-backed schemes, or affordable housing, opportunities remain strong. For traditional buyers and sellers, patience and realistic expectations are key.

Interested in investing in the UK? Speak with a member of our team today.

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About the author:

Raj is a seasoned investment advisor with over a decade of experience in the offshore market, specialising in prime off-plan property developments across the UK. His broad expertise spans a variety of asset classes, yet it is his self-admitted passion for property that has refined his ability to spot exceptional developments and prime locations. Having lived and worked in diverse locations around the globe, Raj now enjoys the relaxed Mediterranean lifestyle on the coast of Southern Spain, where he resides with his wife. His global perspective and keen eye for investment opportunities make him an invaluable resource for expat clients.