Let’s take stock of the housing market as we head into the second half of the year.
Overall, conditions continue to favour buyers. Mortgage rates have dipped slightly from last year’s peaks, but this modest relief has not spurred a rush of new demand. Instead, supply is growing faster than buyer appetite, putting downward pressure on prices—especially in more expensive postcodes.
According to Rightmove, UK average asking prices in May were up just 1.2% compared to last year, and that headline figure hides some stark regional differences. Central London remains under real strain, due in part to upcoming changes to non-dom tax status, which have cooled the appetite of international buyers. Westminster prices are down 18% year-on-year, Kensington and Chelsea by over 11%, and other prime areas like Fulham and Islington have also weakened noticeably. Flats in these parts of London often linger on the market for months, despite significant price reductions.
Beyond central London, other boroughs are showing more resilience, and the broader South East is holding up relatively well. For example, towns like Epsom are up about 3% year-on-year, a sign that demand for family houses in commuter areas remains steadier than for prime city apartments.
Transaction numbers paint a similar picture of a sluggish market. Completions rose sharply in the first quarter as buyers rushed to close before the end of the stamp duty relief period—sales were up 58% on last year, reaching about 310,000. But that’s still below the long-term average for the 2000s and closer to levels last seen in the early 90s recession. For context, a ‘normal’ quarter is typically around 250,000 sales.
A few structural issues continue to weigh on activity. Many younger buyers remain locked out by high prices and tighter mortgage affordability rules. Older homeowners with little or no debt often prefer to stay put, while middle-aged owners—the usual drivers of upsizing or downsizing—see little incentive to move when the costs of stamp duty and transaction fees can easily outweigh any modest price gains.
In short: if you’re a buyer today, you have more room to negotiate than you have for many years. If you’re a seller, realistic pricing is essential. And for everyone—remember that your home is primarily a place to live, not a guaranteed investment return.
If you’d like to explore how this affects your own property plans, or to see what’s happening in your area, I recommend this helpful resource: BuiltPlace Local Market Reports.
For my broader views on property as an investment, you can read more here: Why Property’s a Problem.