The UK housing market is set for a subdued year, as both Savills and Rightmove cut their forecasts for house price growth in 2025, reflecting a combination of weak buyer activity, rising property supply, and lingering geopolitical uncertainty.
Savills, one of the country’s leading estate agents, has downgraded its forecast from 4 per cent annual growth to just 1 per cent, citing a “weaker than expected” first half of the year. The revision follows a similar move by Rightmove, which now predicts a 2 per cent rise, down from its earlier estimate of 4 per cent.
The downward revisions suggest that real-term house prices are falling, as inflation continues to outpace nominal price growth. The latest data from Nationwide puts annual house price inflation at 2.1 per cent, compared with consumer inflation including housing costs at 4.1 per cent, according to the Office for National Statistics.
Lucian Cook, head of residential research at Savills, said geopolitical uncertainty—particularly stemming from President Trump’s escalating tariff policies—has made forecasting more complex and dampened activity in the housing market.
“Interest rates have fallen as expected, giving buyers more financial capacity, but a lot has changed in the past six months,” Cook said. “The prospect of future tax rises, particularly in the autumn budget, is likely to weigh heavily—especially at the top end of the market.”
Rightmove, meanwhile, pointed to a surge in housing supply as a major factor behind the slowdown in price growth. The property portal said stock levels are at their highest in over a decade, and that high levels of seller competition are limiting the ability of vendors to raise prices.
“More new sellers are conscious of this and are responding to the high-supply market with stand-out pricing to entice buyers,” said Colleen Babcock, Rightmove’s head of partner marketing.
Following the post-pandemic boom—driven by the so-called “race for space”—the market is experiencing a rebalancing, with supply now outstripping demand in many areas.
Despite the downgrade for this year, Savills remains broadly upbeat about the longer-term prospects for house prices. While it has cut its 2026 forecast from 5.5 per cent to 4 per cent, the firm has raised projections for 2027 through 2029 due to looser mortgage affordability tests and the expected continuation of falling interest rates.
Over the five-year period from 2025 to 2029, Savills now predicts a cumulative house price increase of 24.5 per cent, slightly higher than its previous estimate of 23.4 per cent.
“Falling interest rates in combination with relaxation around affordability tests will open up greater capacity for house price growth than would otherwise be the case,” said Dan Hill, research analyst at Savills.
This shift is expected to boost transaction volumes and unlock market activity that has been delayed by affordability constraints and broader economic uncertainty.
The housing market’s slowdown comes amid a fragile economic and policy backdrop. The threat of future tax increases, ongoing trade disruption due to Trump’s tariff war, and the potential impact of government regulation remain front of mind for buyers and sellers alike.
With the autumn budget on the horizon, economists and market watchers will be looking for further signals about housing policy, including potential adjustments to stamp duty, capital gains tax, and landlord regulation—all of which could influence confidence in the months ahead.
For now, the consensus is clear: the era of rapid house price inflation has paused, and a more balanced—but cautious—market is likely to prevail through the rest of 2025.
