Property Market Update August 2025: Interest Rate Cuts and Tax Proposals Shake Up the Landscape

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Property Market Update August 2025: Interest Rate Cuts and Tax Proposals Shake Up the Landscape

Most landlords are holding their breath.


The property market is shifting beneath our feet.


With interest rates falling and new tax proposals looming, August 2025 brings both opportunities and challenges for property investors across the UK.

Interest Rates Finally Drop


The Bank of England has cut the Bank Rate to 4.00%, down from 4.25%. This marks the first reduction since the hiking cycle began in late 2021.


But here's the interesting part...


The decision wasn't straightforward. The Monetary Policy Committee was deeply divided, requiring a rare two-round vote. The final tally showed 5 members in favour of the cut, with 4 preferring no change. One member had initially pushed for a larger 0.50 percentage point reduction.


This split decision suggests uncertainty about the economic outlook, even among the experts.


What does this mean for property investors?


Lower interest rates typically reduce mortgage costs, potentially improving cash flow for leveraged property investments. For our investors at Chant Properties, this could mean better returns on future acquisitions.


Affordability Improves for First-Time Buyers


There's good news on the affordability front.


House prices are now 5.75 times the average income – the lowest level in over a decade. This improved affordability has helped support a rebound in the market.


For property investors, this creates an interesting dynamic:


  • More first-time buyers are entering the market
  • Potential for capital appreciation as demand increases
  • Opportunity to acquire properties in areas with strong growth potential


Landlord Income Insights


Did you know only 5% of landlords earn a gross income over £50,000?


This statistic highlights an important reality: most landlords aren't the wealthy property tycoons often portrayed in the media. The majority are everyday people supplementing their income through property investment.


At Chant Properties, we've always focused on creating sustainable returns for our investors, regardless of market conditions.


Political Drama Affects the Property Market


On 7 August 2025, Rushanara Ali resigned as Minister for Homelessness following controversy over her own property dealings.


Reports revealed she had evicted four tenants from a property she owned and, after failing to sell it, re-let it for approximately £700 more per month – increasing the rent from around £3,300 to £4,000.


The irony wasn't lost on landlords across the country.


This situation highlights the complex relationship between politics and property, and the challenges of balancing tenant protection with landlord rights.


Concerning Tax Proposals for Landlords


The most worrying development for property investors comes in the form of potential tax changes:


National Insurance on Rental Income


Officials are considering applying National Insurance contributions to rental income – essentially a new tax on landlords. This move aims to plug a £40 billion fiscal gap and could raise approximately £2 billion.


Capital Gains Tax on High-Value Home Sales


There's also discussion about potentially taxing home sales over £500,000, possibly replacing stamp duty and council tax with national or local property taxes.


These proposals have understandably stirred up anger among UK landlords. Many are already dealing with increased regulation and costs.


Companies House Identity Verification


From 18 November 2025, Companies House will implement mandatory identity verification:

  • New directors will need to verify their identity to incorporate a company or join an existing one
  • Existing directors must confirm identity verification when filing their next annual confirmation statement
  • Existing PSCs (People with Significant Control) will need to verify their identity within 12 months of the 18 November commencement date


This change aims to increase transparency and reduce fraud in the UK business environment.


Our Take on the Current Situation


The property market feels like it's in a holding pattern.


Everyone seems to be waiting for the Renters Rights Reform to come into effect before making major decisions. The budget proposals for early November have created additional uncertainty.


At Chant Properties, we're monitoring these developments closely. Our approach remains focused on:

  • Identifying value-add opportunities in the North East
  • Maintaining strong returns for our investors
  • Adapting our strategy to navigate regulatory changes


Despite the challenges, we continue to see strong potential in the Northern property market, particularly in Newcastle and surrounding areas.


What This Means for Investors


If you're currently investing in property or considering it, here's what you should keep in mind:

  • The interest rate cut provides some relief for mortgage holders
  • Potential tax changes could impact returns – diversification remains important
  • Improved affordability may create opportunities in certain market segments
  • Regulatory changes require staying informed and adaptable


Looking Forward


The coming months will be crucial for property investors. The November budget will likely provide clarity on the proposed tax changes, while the implementation of the Renters Rights Reform will reshape the landlord-tenant relationship.


At Chant Properties, we're here to help you navigate these changes. Our experience and straight-talking approach mean you'll always get honest advice about the market and investment opportunities.


Want to discuss how these changes might affect your property investment strategy? Get in touch for a friendly chat.





This blog post was written by Chris and Anthony Hunter, founders of Chant Properties Ltd. The information provided is based on market data available as of August 2025 and represents our current understanding of the property market. Always seek professional advice before making investment decisions.


Sources:

Bank of England

The Guardian

Savills

GOV.UK


Please fact-check all information before publishing, particularly the statistics, dates, and specific details about policy changes.


UK Property Market Update: July 2025

By Chris Hunter • August 2, 2025
The market resets as prices dip, supply rises, and reform looms The property market is finally catching its breath. After years of volatility driven by inflation, interest rate hikes, and pandemic aftershocks, we're now seeing a more stable—though still competitive—landscape shaped by falling prices, improved affordability, and active policy debate. Here's what's happening across the UK housing market in July 2025: 📉 Asking Prices: A Historic July Dip This month, Rightmove reported that average asking prices fell by 1.2% to £373,709 , marking the steepest July decline in over two decades . Inner London saw the sharpest regional fall at –2.1% , followed by the South East ( Rightmove , The Guardian ). Despite this, buyer activity remained robust , with sales agreed up 5% year-on-year , showing that well-priced homes are still moving in today’s market. 🔍 Regional Overview North East England Annual house price inflation remained the strongest in North East England, at +6.3% to May 2025 — far above the national average Alastair Saville+6Office for National Statistics+6GOV.UK+6 . Asking prices rose by 1.2% in July, with average values around £196,844—one of the few regions showing resilience amid broader market softness. MoneyWeek+2Forbes+2MoneyWeek+2 . Strong rent inflation, at 9.7% year-on-year (June 2025), highlights continued demand for rental housing and supports investor interest Zoopla+3Office for National Statistics+3AInvest+3 . Property sales in hotspots like Newcastle and Sunderland continue to lead regional growth, with prices rising between 2%–5% annually in more affordable areas like Sunderland (£119K average) Office for National Statistics+13Zoopla+13AInvest+13 . Yorkshire & the Humber From the UK government data, Yorkshire posted the highest monthly house price increase in May (+2.4%), with year-on-year growth of 5.1% The Times+3AInvest+3HomeOwners Alliance+3 . North Yorkshire recorded average house prices of around £204,000 by May 2025, up from £194,000 a year earlier. Semi-detached homes rose the fastest (+6.4%), Office for National Statistics . Rental markets here remain more subdued compared to the North East: rental inflation in Yorkshire & the Humber averaged just 3.5% to June 2025 Savills+15Office for National Statistics+15guildproperty.co.uk+15 . 🏘️ Government Data: Prices and Transactions According to the ONS , the average UK house price rose by 3.9% in the 12 months to May , reaching £269,000 . Meanwhile, rents climbed 6.7% , driven by tight supply—particularly in the North East , which saw a staggering 9.7% rent increase ( ONS ). The Land Registry confirmed these trends, showing an average sale price of £268,652 in May, reflecting 1.1% annual growth , with newer data due in mid-September ( Land Registry ). Transaction activity also rebounded: HMRC reported 81,470 completed residential transactions in May , up 25% from April , but still 12% below May 2024 levels . Much of this is attributed to buyers rushing to beat stamp duty threshold changes in April ( HMRC ). 🏦 Mortgage Rates & Lending Affordability is gradually improving. The average two-year fixed mortgage rate fell to 4.53% , down from over 5.3% a year earlier. This equates to a monthly saving of around £150 for the average borrower ( The Guardian ). The Bank of England’s easing of affordability stress tests is also expected to unlock lending for an estimated 36,000 extra first-time buyers annually , making it easier for households with good credit but limited deposit capacity to enter the market ( The Guardian ). 🧱 New Builds & Rental Trends In the new-build sector, buyer demand remained strong in areas like Southampton (35% sold subject to contract) , Sheffield , and Bristol , while weaker interest was noted in Swansea and Liverpool ( WealthWise ). The rental market is bracing for transformation. The anticipated Renters’ Rights Bill , likely to pass in early 2026, would ban Section 21 evictions, cap rent hikes, and introduce an independent ombudsman. Some landlords warn this could restrict rental supply further and increase upward pressure on rents ( The Week ). ⚖️ Policy Pressure: Stamp Duty & Downsizer Relief Calls for stamp duty reform are growing louder. According to Rightmove, only 40% of homes now fall under the SDLT exemption threshold , down from 53% in 2017. The current thresholds are seen as outdated and a barrier to mobility ( FT ). There’s also a push to offer stamp duty relief for downsizers , with the potential to free up 2.5 million homes over five years , improving availability for younger families and first-time buyers ( Country Life ). 🔮 What’s Next? Forecasts for 2025 Rightmove cut its full-year house price forecast from +4% to +2% , citing competitive supply and affordability caps ( Rightmove ). Zoopla expects price growth to hold near 2.5% , focused mostly in affordable northern markets. Savills and others have downgraded 2025 expectations to just +1% , with recovery forecasts shifted toward 2026–2027 ( The Times ). ✅ Summary: A Market in Reset Mode The UK property market in July 2025 shows clear signs of recalibration: Prices are cooling, especially in the South, while demand remains resilient Affordability is improving, but buyers are increasingly price-sensitive Stock levels are rising, giving buyers more leverage Policy changes and lending reforms are reshaping the market For buyers and investors, this is a moment of opportunity—if you're prepared. For sellers, it's more important than ever to price realistically and understand local dynamics. The property market is finding its new balance after years of extremes. Those who understand these shifting dynamics will be best positioned to make smart decisions in the months ahead. Note: All facts and statistics in this report are accurate as of the publication date in July 2025. Property market conditions change frequently, so please verify the latest data before making any investment decisions.

UK Property Market Update: What Happened in June 2025 and What It Means for Investors

By Chris Hunter • July 25, 2025
House prices stalled. Buyer demand picked up. Supply increased. The UK property market is at a turning point this summer, with mixed signals creating both challenges and opportunities for investors and homeowners alike. Let's break down what's happening and why it matters... The Big Picture: June 2025 Market Snapshot House Price Trends The latest figures show a market that's cooling after last year's growth: Halifax index : 0.0% monthly change with the average price at £296,665 (2.5% higher year-on-year, down from 2.6% in May) Nationwide HPI : A 0.8% month-on-month decline and just 2.1% annual growth (down from 3.5% in May), with average prices around £271,619 Zoopla : Modest 1.4% annual growth as of May (published in June), though sales activity increased with 14% more homes on the market Rightmove : A rare June decline in asking prices, down 0.3% to £378,420 The numbers tell a clear story - price growth is slowing across all major indices. Regional Variations Not all areas are feeling the same effects: Northern England saw around 3.1% annual house price growth Southern England managed about 2.2% Northern Ireland led the way with impressive 9.7% growth for Q2 2025 The North East continues to outperform other English regions with 6.3% year-on-year growth and a 2.2% monthly increase in May. Newcastle upon Tyne stands out with prices up 13.4% compared to last year. What's Driving These Changes? Several factors are influencing the current market: Stamp duty increases in England (April 2025) dampened demand in spring Rising supply with 11% more properties on the market year-on-year Rental market pressure continues with UK average rent reaching £1,339 in May (7% annual growth) Covid-era purchases being re-listed, especially in rural and coastal areas What This Means For You For Buyers The market is shifting in your favour. With more properties available and price growth slowing, you have more negotiating power than at any point in the last three years. First-time buyers in particular should take note - this could be the window of opportunity many have been waiting for. For Sellers Be realistic about pricing. The days of ambitious asking prices and quick sales are fading. Properties need to be competitively priced to attract attention. Rightmove data shows homes receiving an enquiry on day one were 22% more likely to sell than those delayed more than two weeks. For Investors The rental market remains strong despite the sales slowdown. With average rents rising faster than mortgage costs in many areas, buy-to-let still offers attractive yields for those who can navigate the regulatory landscape. North East England presents particularly interesting opportunities with rental growth of 9.7% - well above the national average. Looking Ahead: Market Outlook The consensus among experts points to a subdued 2025: Savills lowered its full-year growth outlook from 4% to around 1% Rightmove adjusted from 4% to approximately 2% Most forecasts suggest a modest rebound (3-4%) in 2026-29 The RICS survey shows a market steadying rather than booming this summer, with 47% of agents foreseeing rent increases and most respondents expecting price growth to return within 12 months. The Bottom Line June 2025 marks a turning point for the UK property market. After years of exceptional growth driven by pandemic factors and low interest rates, we're seeing a return to more normal conditions. For smart investors, this isn't bad news - it's simply a different market requiring different strategies. The fundamentals remain strong, particularly in the rental sector and in regions like the North East where growth continues to outpace the national average. What's your next move in this changing market? Are you looking to buy, sell, or hold? Let us know in the comments. Remember to check the latest data before making any property decisions. This analysis is based on figures available as of June 2025.