“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”
– Marc von Grundherr – Benham and Reeves
The UK housing market has continued to show resilience this year, with the latest Property Market Index Review from London lettings and estate agent Benham and Reeves revealing that average house prices rose for a second consecutive quarter in Q2 2025. This follows four straight quarters of growth recorded throughout 2024.
The Benham and Reeves Property Market Index Review is a quarterly analysis combining data from four leading house price indices, offering a broad view of both UK and London market trends. The report calculates the geometric mean of:
Mortgage-approved house prices from Halifax and Nationwide
Seller expectations from the Rightmove House Price Index
Sold prices from the UK House Price Index
Current property values
According to the index, the average UK house price stood at £305,680 in Q2 2025. This reflects a 0.7% rise from the previous quarter, marking the second consecutive period of growth and extending the positive trend seen throughout 2024. On an annual basis, prices were 2.3% higher compared with Q2 2024.
In London, the average property value reached £593,620, up 0.9% quarter-on-quarter and 1.1% higher year-on-year. This represents the capital’s second quarter of growth in 2025.
Market gap between mortgage approvals and asking prices
The report shows a widening gap between what buyers can afford and what sellers are asking. In Q2 2025, the difference between the average mortgage-approved price (£284,307) and the average asking price (£378,312) stood at 33.1%.
This marks the largest gap since Q2 2024, when it was 35.5%, suggesting that while buyer confidence is improving, affordability remains limited by higher mortgage rates.
In London, the gap between mortgage-approved prices (£532,449) and seller asking prices (£698,863) reached 31.3%, also the widest since Q2 2024.
Market gap between asking and sold prices
The Property Market Index Review also highlights an increase in the difference between asking and sold prices. Across the UK, the average sold price in Q2 2025 was £265,560, which is 29.9% lower than the average asking price of £378,312. This is the widest disparity since Q3 2024, indicating that while buyer demand remains solid, sellers are still overestimating achievable sale prices.
In London, the gap between asking and sold prices widened to 19.6%, continuing a trend that has persisted over the last four quarters.
“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,” said Marc von Grundherr, director of Benham and Reeves. “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,” von Grundherr continued. “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.”