House price momentum cooling but sales growth expected in the Midlands – Zoopla

House price growth is losing momentum as economic uncertainty and seasonal factors cool demand, according to a property website.

Zoopla said that UK house prices increased by 1.6% in the year to March 2025, slowing from an annual growth rate of 1.9% in December 2024.

The average price of a home is £268,000 – an increase of £4,270 over the past year – the report said.

The number of homes coming onto the market is rising faster than buyer demand, which is also keeping house prices in check, with the average estate agent branch having 34 homes for sale, compared with 31 a year earlier, according to Zoopla.

The report said: “The weakening in-buyer demand is partly seasonal, reflecting the Easter holidays, while global events and uncertainty over the economic impact of tariffs are likely to be causing hesitation amongst some buyers.”

The number of sales agreed is holding up and is higher than a year ago, Zoopla said.

The website also highlighted that changes to some lenders’ affordability calculations for mortgages could boost some buyers’ borrowing power.

Some lenders have recently announced changes to stress rates used in their affordability calculations, which could increase some people’s ability to borrow.

Stress rates are used to check whether borrowers can still afford their mortgage if rates were to increase.

The Financial Conduct Authority (FCA) is looking at its expectations for mortgage lending as part of proposals to streamline its rules, which could make it easier for more people to access home loans.

The average estate agent branch has 34 homes for sale, compared with 31 a year earlier, Zoopla said.

Expectations for lower interest rates over 2025 look set to keep mortgage rates at current levels or lower, the report added.

On Monday, HSBC UK announced a range of mortgage rate cuts of up to 0.24 percentage points, increasing the number of mortgage deals it is offering with rates at below 4%.

Rates for HSBC’s Premier customers, who must fulfil certain criteria, have been cut to as low as 3.88%. Rates for non-Premier customers include a two-year home buyer deal priced at 3.91%, for buyers who have a 40% deposit and a £999 fee.

The Midlands among regions set to lead house price recovery

Richard Donnell, executive director at Zoopla, said: “While house price growth is expected to slow further, towards one to 1.5%, we’re still on course for a 5% uplift in sales volumes in 2025, assuming sellers remain pragmatic on pricing.

“Regions where affordability is better aligned to local incomes, particularly across the North and Midlands, are set to lead this recovery.

“One of the biggest supporters of continued market activity lies with mortgage lenders. Revisions to how lenders are assessing mortgage affordability will unlock additional buying power and support sales volumes to help tackle the healthy stock of homes for sale.”

Martin Fishwick, senior partner at North West England estate agent Jordan Fishwick, said: “After an extraordinary March where many buyers and solicitors on their behalf were anxiously keen to secure their purchase prior to the stamp duty increases, the market has inevitably calmed somewhat in the North West.

“However, there is still momentum from buyers given the significant rise in rents currently available and the more attractive mortgage rates on offer.”

The figures were released as property website Rightmove said that the average advertised rent of new properties coming onto the market across Britain, excluding London, reached a record of £1,349 per month in the first quarter of this year.

Average advertised rents in London also rose, to a record of £2,698 per month in the first quarter of 2025.

Rental homes across Britain are receiving 12 inquiries typically, Rightmove said. While this has cooled from an average of 16 at the start of last year, it is still more than double the average of five seen over the first three months of 2019.

But in a sign of stretched affordability, more landlords are having to reduce advertised rents to find a tenant.

A quarter of rental properties are seeing a reduction in the advertised price, the most at this time of year since 2018, Rightmove said.

Rightmove’s property expert Colleen Babcock said: “On the whole, the balance between supply and demand is improving. This is having a knock-on effect on rental prices, with rents increasing more slowly and more landlords reducing their advertised price.”