Residential Property Market Spring Update 2025

As we move into Spring 2025, the UK residential property market is showing cautious signs of stability.

Following a relatively active start to the year, the latest figures from Nationwide and Halifax suggest a market that is holding its breath, waiting for further political and economic certainty ahead of the anticipated Autumn Budget.

House prices rose marginally in March, with Halifax reporting a 0.3% monthly rise and Nationwide a 1.1% annual increase.

Mortgage approvals have edged upward for the fourth consecutive month, and the Bank of England has held the base rate at 4.75%, signalling a “wait-and-see” approach.

Encouragingly, Zoopla reported a 12% increase in new listings compared to the same period in 2024 — a sign of renewed confidence among sellers.

Despite this, affordability challenges and planning barriers continue to weigh heavily on the sector, as Vail Williams’ Head of Residential Property, Gary Jeffries, explores below.

Planning system reform: Progress or pre-election promises?

The early months of 2025 have seen the government press ahead with aspects of its October Budget announcements.

The Planning and Infrastructure Bill is progressing through Parliament, with the proposed introduction of mandatory housing targets and a simplified approval process for strategic sites gaining support — although the implementation timetable remains uncertain.

Local Planning Authorities continue to face capacity issues, despite the ongoing recruitment of the 300 additional planning officers announced last year.

The planned Local Plan updates have been slow to materialise, with just 15% of councils having published new drafts by the end of March. This has left developers navigating a complex and often inconsistent planning landscape.

However, there are green shoots.

The New Homes Accelerator taskforce has begun working on several key stalled sites in the Midlands and North West, with reports suggesting up to 20,000 units could be unlocked before year-end if agreements are reached.

Affordable housing: More funding, same barriers

The Affordable Housing Programme’s (AHP) uplift to £3.1bn remains in place, with Homes England launching a new funding window in early April.

The additional £500m announced last year is earmarked for new delivery partnerships, with some early signs of movement — particularly in the South East and East Midlands.

However, as before, Registered Providers continue to struggle. High build costs, inflationary pressures, and a backlog of stock maintenance mean that appetite for new Section 106 acquisitions remains low. Reports from the G15 group in London show a 28% year-on-year drop in affordable housing starts in Q1 2025.

Land market watch: Value shift continues northward

Residential land values are showing a geographically divided picture.

Greenfield sites in northern England and the Midlands have seen moderate uplifts in Q1 2025 — averaging +1.7% — driven by buyer demand, relatively lower entry costs, and improved delivery confidence.

By contrast, London and the South East remain subdued.

Urban brownfield sites, particularly those earmarked for Build to Rent schemes, are still under pressure due to elevated borrowing costs and viability concerns. In many southern markets, developers are pivoting away from high-density delivery in favour of family housing and phased release strategies to mitigate risk.

Positive sentiment is returning among national housebuilders, with PLCs beginning to re-enter the land market more decisively, particularly for large-scale consented sites.

Outlook for Summer and beyond

Spring has brought a more optimistic tone to the residential property market — but this remains a fragile confidence.

The fundamentals of supply and demand continue to support long-term growth, but the challenges of planning, inflation, and affordability remain.

Urban viability, in particular, is under strain, and developers are increasingly reliant on partnerships and funding mechanisms to move schemes forward.

Still, we are seeing early indicators of recovery in land values and a modest return to market activity.

Much now hinges on the trajectory of interest rates, clarity from government and the practical implementation of planning reforms.

With that in mind, we remain cautiously optimistic for the second half of the year — especially for developers and investors who are well-capitalised and able to move swiftly on opportunities as they arise.