Zoopla’s most recent insights into the UK housing market paint a nuanced picture of recovery, resilience, and shifting trends as we pass through the heart of 2025. Despite the typically quieter summer months, the July housing market has demonstrated a strength that surpasses last year’s performance, revealing both the adaptability of buyers and sellers, and the evolving dynamics of property transactions in a landscape marked by regulatory and economic change.

Central to Zoopla’s findings is the notable increase in market activity. The House Price Index for July 2025 shows that agreed sales have climbed by 8.0% compared to the same period in the previous year, a clear signal that buyer confidence and willingness to transact have withstood recent challenges. Equally significant is the 11.0% rise in buyer demand, a jump that underscores a renewed appetite for homeownership, even as the market traditionally slows down for the season. This resurgence in demand comes amid an unprecedented level of supply. According to Zoopla, the number of homes listed for sale is at its highest since records began, with agents now averaging 37 per branch. Such a vast choice of properties has shifted the power balance, reinforcing the current status as a buyer’s market, especially in regions like southern England where listings are especially abundant.

The buoyancy in transactions and listings is, in part, attributed to regulatory adjustments designed to increase affordability. Notably, recent changes in mortgage rules have allowed buyers to borrow as much as 20.0% more than would have been possible only months ago. This relaxation in lending criteria has given prospective homeowners newfound leverage, boosting their purchasing power and facilitating transactions that might previously have been out of reach. As a result, a broader segment of the population is finding itself in a position to consider moving up the property ladder or stepping onto it for the first time.

However, this positive movement comes with new costs. On 1 April, the UK government reinstated pre-pandemic stamp duty thresholds, raising the cost of purchasing a home. The impact of this policy shift has been profound for Zoopla’s research finds that 83% of homeowners have paid stamp duty on new purchases since April, a substantial increase from the 49% recorded before the change. This additional outlay has tightened budgets and introduced new calculations for buyers, many of whom now expect these higher costs to be reflected in asking prices. The market has responded with a degree of flexibility, as sellers adjust their expectations and asking prices moderate, making homeownership more accessible despite the elevated tax burden.

A further source of relief has come from the mortgage sector. Anticipating a potential cut in the Bank of England’s base interest rate, currently held at 4.25%, lenders have already begun to reduce their mortgage offerings, with some rates for new mortgages and remortgages dipping to 4.0% and below. The expectation that the Monetary Policy Committee (MPC) will enact a cut in its August meeting has injected further optimism, as cheaper borrowing costs are expected to offset some of the financial strain imposed by higher stamp duty and earlier rate hikes. These developments have contributed to a more favorable environment for buyers, helping to support continued growth in sales and underpinning the overall health of the housing market.

Nevertheless, the pace of house price growth has moderated. At the start of the year, forecasts predicted an increase of 2% in house prices for 2025, but Zoopla’s data now suggests that prices are on track to rise by just 1%, half the level originally expected. This subdued inflation is attributed to both the abundance of homes on the market and mortgage rates that have remained higher than the long-term average. While this may disappoint some sellers seeking quick equity gains, it has broader benefits for market stability. The equilibrium between supply and demand is fostering confidence, encouraging more homeowners to list their properties and more buyers to make offers without fear of unsustainable price surges.

Richard Donnell, executive director at Zoopla, encapsulated the current mood and direction of the market in his latest statement. He affirmed that the UK housing market is “broadly in balance,” pointing to the healthy levels of both demand and sales. Donnell emphasized that, despite increased activity, the market is not experiencing runaway price inflation. The surge in homes for sale, particularly in southern England, is reinforcing a buyer’s market and keeping price rises in check. He pointed out the significant increase in the proportion of home buyers paying stamp duty since April, which has led many to expect this extra expense to be offset by lower home prices. Donnell also highlighted that “less stringent affordability testing has boosted buying power and is supporting more sales despite increased uncertainty.” While mortgage rates hold steady, the ability to borrow more and the wide selection of homes for sale have helped invigorate transactions. Donnell concluded by noting that, although house prices will rise by about 1% this year, half the level forecast, this low inflation is not a negative outcome as long as there is enough confidence in the market to encourage both listings and bids. The essential ingredients for a healthy market, he suggested, are present: choice, affordability, and stability.

Overall, Zoopla’s latest data and analysis indicate that, while the UK housing market in July 2025 faces new challenges, most notably the return of higher stamp duty and persistent uncertainty around interest rates, the market’s fundamentals remain strong. Increased affordability through relaxed borrowing rules and lower mortgage rates has encouraged activity, while an abundance of choice has kept prices in check. As the year unfolds, the market is expected to continue its steady, if subdued, growth, providing a landscape that is navigable for both buyers and sellers alike.