The UK property market has continued to show resilience in 2025, with average house prices increasing for a second consecutive quarter in Q2, according to the latest Property Market Index Review from London lettings and estate agent Benham and Reeves.
The quarterly index combines data from the UK’s four leading house price sources – Halifax, Nationwide, Rightmove and the UK House Price Index – to provide a comprehensive view of performance across both the UK and London. Using a geometric mean of all four, Benham and Reeves found that the average UK house price stood at £305,680 in Q2 2025.
This represented a 0.7% quarterly rise, building on four consecutive quarters of growth recorded in 2024.
On an annual basis, prices were 2.3% higher than in Q2 2024. In London, the average property value reached £593,620, up 0.9% on the previous quarter and 1.1% year-on-year, also marking the second successive quarter of growth.
The research showed that in Q2 2025 the market gap between the average mortgage-approved price (£284,307) and average asking price (£378,312) stood at 33.1%, the widest since Q2 2024.
In London, the gap between mortgage-approved values (£532,449) and asking prices (£698,863) was 31.3%.
The findings indicate that while buyer activity is strong, affordability remains constrained by elevated borrowing costs.
The index also found that the average UK sold price in Q2 was £265,560, which is 29.9% below the average asking price.
In London, the difference between asking and sold prices reached -19.6%, the largest in a year, reflecting ongoing over-optimism among sellers.
Marc von Grundherr, director of Benham and Reeves, said: “The housing market has demonstrated a great degree of resilience in 2025 and despite the turbulence of the wider economic landscape, we’ve seen house prices climb at a slow but consistent rate.
“Buyers have returned at mass, with mortgage approvals posting above the 60,000 monthly threshold for well over a year now.
“However, they remain restricted by higher interest rates which are impacting their mortgage affordability and the price they are willing to commit to when purchasing.
“In contrast, sellers are sitting stubbornly firm when it comes to their asking price expectations, which is evident from the widening gap between mortgage approved house prices and asking prices.
“However, those who are securing a sale are the ones taking a pragmatic approach to current market conditions and adjusting their expectations accordingly.
“We’ve seen the level at which they’ve had to do so increase over the last year, but it does demonstrate that buyer appetites are healthy, as long as the property you are selling is within financial reach.”
