Mortgage Rule Changes Help UK Housing Market Defy Summer Slowdown
The UK housing market has avoided its typical summer lull, thanks to recent changes in mortgage affordability rules that have boosted buyer power by up to 20%, according to new data from Zoopla.
The government-backed update to how lenders assess mortgage applicants has sparked a surge in activity, with buyer demand up 11% and sales agreed rising 8% year-on-year in July. With a record number of homes for sale, the market has tipped toward a buyer’s market, keeping UK house price growth modest despite stronger activity.
Zoopla reports the average UK house price in June was £268,400, up 1.3% year-on-year—a slower pace than originally forecast. The property platform has now revised its 2025 house price forecast from 2% growth to just 1%, citing more cautious buyer offers in the wake of stamp duty increases in England and Northern Ireland.
“Less stringent affordability testing has boosted buying power,” said Richard Donnell, Executive Director at Zoopla. “The market is broadly in balance—more homes are coming to market, especially across southern England, which is reinforcing a buyer’s market and keeping price rises in check.”
Regional Trends and Rental Market Insights
- Northern England, Scotland, and Wales are seeing faster house price growth (2–3%) compared to southern regions like London and the Southeast (0.2–0.3%).
- Rental prices continue to rise, hitting new records: £1,365/month outside London and £2,712/month in the capital, according to Rightmove. However, rent growth is slowing, with 24% of advertised rents reduced during marketing—the highest since 2017.
- Rental supply has improved, up 15% year-over-year, although it remains 29% below pre-pandemic levels.
With mortgage rates stable and the property supply expanding, the housing market appears to be heading toward more balanced conditions for both buyers and renters.
