Is Rachel's house of cards set to crash down?

HOUSE prices continue to hold firm despite the mounting economic problems facing the UK, but how long can this last? As Chancellor Rachel Reeves struggles to balance the books, growth slows and taxes rise, the resilience of the housing market is a rare positive.

- By Harvey Jones

Prices even climbed again in May, despite the end of the stamp duty holiday in March. However, experts warn the market remains fragile.

Last week, Reeves announced new plans to help first-time buyers get on the ladder. But her proposals drew a mixed response, as they rely on allowing borrowers to take on more debt to keep up with prices that already look unaffordable.

With inflation proving sticky and mortgage rates under renewed pressure, more trouble could lie ahead. Is a crash on the cards?

GLOOM

Average UK house prices rose 3.9% in the year to May 2025, lifting the typical price to £269,000, according to latest official figures.

That marks a slight acceleration from 3.6% growth in April. It’s an impressive performance given the economic gloom, but this is no boom.

Chris Storey, chief commercial officer at Atom Bank, said: “With estate agents seeing drops in new buyer registrations and Rightmove reporting vendors dropping prices, further house price growth may be subdued, in the short term at least.”

The headline numbers disguise a tale of two markets, said Jonathan Hopper, chief executive of Garrington Property Finders: “This is a reset rather than a resumption of business as usual.”